Preamble

The House—after the Adjournment on 19th December, 1969, for the Christmas Recess—met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

BRIGADIER SIR FRANCIS REID, C.B.E.

Sir Robert Cary: On a point of order. Is it true, Mr. Speaker, that your Private Secretary, Sir Francis Reid, died suddenly over the weekend? If that be true, then it is a matter of deep regret to all Members on both sides of the House who shared deep friendships with Sir Francis. Will you, Mr. Speaker, be kind enough to convey our deep sympathy to the members of his family?

Mr. Speaker: I am sorry to confirm what the hon. Gentleman has said. I know that his expression of sorrow and gratitude voices the feeling of the whole House at the passing of an Officer who was the friend of every Member of Parliament.

The Secretary of State for Wales (Mr. George Thomas): On behalf of hon. and right hon. Members on this side of the

House, I should like to be associated with the words of sympathy uttered by the hon. Member for Manchester, Withington (Sir R. Cary). Sir Francis was held in deep affection and respect by both sides of the House, as well as by a wide army outside.

HON. MEMBER FOR MORPETH

Mr. Speaker: I have to report that I have received a letter from the Chief Clerk to Bow Street Magistrates' Court, which I shall read to the House:
Sir, I am directed by the Chief Metropolitan Stipendiary Magistrate, Sir Frank Milton, to inform you that William James Owen, Member of Parliament for Morpeth, concerning whom I wrote to you on 15th January, has today again appeared before this Court and in respect of the charge under Section 1(i)(c) of the Official Secrets Act, 1911, has been remanded in custody until 27th January.
As I understand that the House reassembles at 2.30 today, I am delivering this letter to Commander Wilson so that it may be delivered by hand.

Oral Answers to Questions — WALES

Prince of Wales (Investiture)

Mr. Fred Evans: asked the Secretary of State for Wales whether he is now able to give the net cost to public funds


of the ceremony of the investiture of the Prince of Wales held at Caernarvon on 1st July, 1969; and whether he will make a statement.

The Secretary of State for Wales (Mr. George Thomas): The net cost of the Investiture was about £130,000. As the House will recall, a limit of £200,000 was set and I am very pleased to be able to announce that the cost of this magnificent occasion has turned out to be considerably less than even that modest amount. This was due to receipts from the sale of chairs and commemorative medals being greater than anticipated and to a very strict control being kept on expenditure.

Mr. Evans: Is my right hon. Friend further aware of some of the indirect benefits received—for example, that the American National Geographical Magazine, which charges about 27,000 dollars per page for advertisements, devoted 18 pages to the Investiture, and that this can result in nothing but an increase in tourism for Wales?

Mr. Thomas: My hon. Friend is right to draw attention to that significant free advertisement that Wales obtained. But tourism in Wales increased substantially during the past summer, and I have no doubt that now that the advantages of Wales are known it will increase still further.

Llantrisant (New Town)

Mr. Probert: asked the Secretary of State for Wales what consideration he has given to the Buchanan proposals submitted for a new town at Llantrisant; and what action he proposes to take.

Mr. George Thomas: I am still considering the views of all the bodies who have been consulted about the proposals.

Mr. Probert: Before my right hon. Friend embarks upon what I consider to be the expensive luxury of creating another conurbation, will be consider the views of his hon. Friends and, indeed, of local authorities in South Wales before coming to a decision?

Mr. Thomas: I can assure my hon. Friend and the local authorities concerned that their views will receive the utmost consideration.

Mr. Michael Foot: Will my right hon. Friend undertake that, before he accepts the scheme in any form, there will be a proper survey of what could be achieved in the old town if the equivalent amount of money were spent in housing and in all other respects? Does my right hon. Friend realise that there is mounting opposition to the whole idea of a new town at Llantrisant?

Mr. Thomas: My hon. Friend may be assured that the well-being of the valleys is a top priority with the Government, and that the facts to which he draws my attention are very much in my consideration.

South Wales Valleys (Social and Industrial Requirements)

3. Mr. Probert: asked the Secretary of State for Wales if he will initiate a special study of the social and industrial requirements of the valley communities of South Wales and the cost of meeting those requirements.

The Minister of State, Welsh Office (Mrs. Eirene White): My right hon. Friend does not think that any special study is required. The Government have these matters under continuous review.

Mr. Probert: Is my hon. Friend aware that a study of this kind is absolutely necessary, particularly at the present time, and would be of far greater use for the improvement and maintenance of, in many cases, the existing thriving valley communities?

Mrs. White: I am sure that my hon. Friend appreciates that the needs of the valley communities are very much in the mind of my right hon. Friend and his Ministerial colleagues. We have, of course, studied the problems of the valley towns in "Wales: The Way Ahead". We are in touch with the university colleges which are making studies into special aspects, and the Welsh Council is also studying this aspect.

Mr. Alec Jones: Does not my right hon. Friend agree that some valley communities, such as the Rhondda, have had a surfeit of such investigations, and that what we need now is action and some money to enable us to meet the requirements which are well known?

Mrs. White: I am sure my hon. Friend recognises that we are taking action in


certain very important matters, for example the clearance of derelict land and the improvement of housing.

Employment

Mr. Gwynfor Evans: asked the Secretary of State for Wales what is his assessment of the excess in the number of jobs created in Wales in 1969 over those lost.

Mr. George Thomas: The information is not yet available.

Mr. Evans: Is the right hon. Gentleman aware that the Government's poor record in this field explains the extent of Welsh migration and unemployment? Is he aware that there were 64,000 fewer jobs in Wales for men in 1969 than in 1964, and that the proportionate amount in Britain would be 1,306,000—a disaster which would result in bringing the Government crashing down?

Mr. Thomas: The biggest disaster the hon. Gentleman could have would be if he could not quote figures which were disturbing for Wales. I assure the hon. Gentleman that he must look on the other side of the ledger as well. Industrialists are taking an ever-increasing interest in Wales, and, as the hon. Gentleman knows, are moving in there in considerable numbers. It is little short of staggering that so many new jobs have been created.

Mr. Anderson: Can my right hon. Friend confirm that the assessment requirement would be much more bleak if the run-down of manpower in the mining industry had not been paralleled by the substantial new development policies pursued by the Government?

Mr. Thomas: I am obliged to my hon. Friend. It is true that the run-down in the pits, which began long before we took over responsibility, and which would have taken place whoever was in authority, has been the main challenge which has faced me as Secretary of State, my predecessors, and my colleagues, in trying to get additional employment.

Mr. Gibson-Watt: I recognise the difficulties confronting any Government in respect of an area such as South Wales in particular, but can the right hon. Gentleman go further than he did in his answer to the hon. Member for Carmar-

then (Mr. Gwynfor Evans) and say whether these figures are being looked for, and when they will be available?

Mr. Thomas: The figures will be available within a few months.

Motorways

Mr. Gwynfor Evans: asked the Secretary of State for Wales what plans he has to increase the mileage of motorways in Wales.

Mr. George Thomas: I would refer the hon. Member to my replies to his Questions on 28th February and 25th March, 1969, and my reply to my hon. Friend the Member for Rhondda, West (Mr. Alec Jones) on 4th November, 1969.—[Vol. 778, c. 396; Vol. 780, c. 291–2; Vol. 790, c. 123–4.]

Mr. Evans: Is the right hon. Gentleman aware that those replies were totally unsatisfactory, and they mean that by the middle 'seventies the Welsh proportion of British motorways will be only one-sixtieth?

Mr. Thomas: By the middle 'seventies Wales will see the biggest road programme she has ever known, and the extension of dual carriageway roads on a scale that we could not expect even a few years ago.

Mr. Anderson: Can my right hon. Friend confirm that when the M4 is pushed further westwards to Bridgend and eventually to Pontardulais, for the whole of its new length it will be up to full motorway standard?

Mr. Thomas: It will be either full motorway standard, or dual carriageway standard, which is very near to that. I should not like to give the assurance straight away, but it will be very soon.

Glamorgan and Monmouth

Mr. Roy Hughes: asked the Secretary of State for Wales if he will now state when he intends to publish his new proposals on the reorganisation of local government in Glamorgan and Monmouth.

Mr. George Thomas: Within the next few weeks, Sir.

Mr. Hughes: Does my right hon. Friend appreciate that some of us wish that he would not produce any new proposals at


all, because we very much resent being tied to the English bandwagon in this matter, particularly so because there is now nearly 100 per cent. agreement on the most practical proposals produced by his Department in July, 1967?

Mr. Thomas: I was not unaware of my hon. Friend's feelings, but I must tell him that I shall announce my proposals within the next few weeks.

Mr. Gibson-Watt: When the right hon. Gentleman spoke in the Welsh Grand Committee not long ago, he said that he was changing the name of Monmouth to Gwent. When does the right hon. Gentleman intend to do this? It is a little difficult for those living in Monmouth to know which to call themselves?

Mr. Thomas: I have not noticed that difficulty, and I am there as often, if not more often, than the hon. Gentleman is. When the proposals for local government reform are advanced, the hon. Gentleman will find that this change takes place.

Trunk Road Schemes

Mr. Roy Hughes: asked the Secretary of State for Wales how many dual-carriageway trunk road schemes are expected to start in Wales before the end of the financial year 1970–71; and what is the estimated total cost.

Mr. George Thomas: Nine schemes at an estimated cost of nearly £35 million.

Mr. Hughes: Does my right hon. Friend appreciate that that figure is encouraging, but, in view of the urgent employment needs of Wales, will he make every effort to extend the motorways westwards as soon as possible? Does my right hon. Friend further appreciate that this can be done only by increased public expenditure, to which the Conservative Party is so much opposed?

Mr. Thomas: I agree with every word of my hon. Friend's statement.

Mr. Gower: May I ask the right hon. Gentleman whether any steps are being taken to expedite the completion of the South Wales Motorway, the part which is under-developed between Reading and Chippenham, and also whether he will bring forward, if possible, the extension of that motorway to the west, to Swansea?

Mr. Thomas: I am giving urgent consideration to the question of the extention of the M4 on my side of the Severn Bridge. If the hon. Gentleman had read the newspapers recently, he would have noticed that my right hon. Friend the Minister of Transport had let contracts for the other side of the bridge.

Hospitals (Geriatric Facilities)

Mr. Hooson: asked the Secretary of State for Wales if he will make it official policy to have long-term geriatric facilities available at all local hospitals in Wales in order to facilitate visits by relatives and friends and in order not to move old people from their local environment.

Mrs. White: The recent Report of the Committee on the Functions of the District General Hospital recommended that all hospital geriatric treatment should be based on the district general hospital, but recognised that small hospitals could be used for patients not requiring the full facilities of the district general hospital. These recommendations are still under consideration, but we fully sympathise with the need to keep old people as close to their homes as possible.

Mr. Hooson: Will the right hon. Lady go further and say that where there is a local hospital and nursing facilities are available, she will make the geriatric facilities, not the intensive care facilities, available, because it is a great hardship for old people and their relatives and friends if these people are moved from their local environment?

Mrs. White: I cannot give an absolute assurance in every case, but I understand what is in the hon. and learned Gentleman's mind, and we certainly would not wish to move old people if it were not necessary to do so.

Mr. Gibson-Watt: Can the right hon. Lady say how many small hospitals of this type in Wales are being closed, and how many geriatric cases will have to move?

Mrs. White: I think that if the hon. Gentleman wants the information in such detail he should put down a Question.

By-pass Roads (Proposals)

Mr. Hooson: asked the Secretary of State for Wales why draft plans for


by-passes in Welsh towns such as Welsh-pool are officially categorised as confidential, in view of his policy to invite public discussion of such plans before decisions are taken.

Mr. George Thomas: The proposal which I eventually publish as a draft order under the Highways Act, 1959, is normally the result of careful consideration of several earlier proposals. If every one of these earlier proposals were published while I was considering it, this would cause widespread and quite unnecessary alarm and blight. The Highways Act provides for public discussion after I publish proposals in draft. I am always ready to change my proposals if the discussion indicates that this is desirable.

Mr. Hooson: The right hon. Gentleman does not quite take my point. Perhaps I might give as an example the Welshpool proposals, in respect of which a public meeting is suggested. The public do not know what the proposal is, whereas local bodies such as the council and the N.F.U. have seen the plans. Should not the public see them if we are to have informed discussion at a public meeting?

Mr. Thomas: Yes, Sir. A public meeting will be held in Welshpool as soon as possible after draft orders have been published to explain the proposals to the community. I am prepared to vary the proposals if I am satisfied that public opinion requires it.

Housing

Mr. Gibson-Watt: asked the Secretary of State for Wales (1) what was the total number of new houses completed in Wales for the year 1969, and for the last quarter, for both public and private sectors;
(2) what was the number of houses in both public and private sectors under construction at the end of 1969.

Mr. George Thomas: In the public sector 7,998 houses were completed in Wales in 1969, 2,210 of them in the last quarter. The corresponding figures in the private sector are 9,306 and 2,353. At the end of the year there were 8,810 under construction in the public sector and 9,747 under construction in the private sector.

Mr. Gibson-Watt: The right hon. Gentleman will appreciate that these figures, complicated as they are, are very unsatisfactory and that they show a rundown in house building in Wales since 1964. Can he say what are the main reasons for this disappointing result?

Mr. Thomas: I have been here a long time, as you know, Mr. Speaker—indeed, I came to this House before you—and it is a long time since I heard anything like that. The hon. Gentleman knows that we are breaking records there. In the last 10 years of office of the party opposite, the average number of houses built in Wales was 13,200. Our average has been 19,000 in five years. The hon. Gentleman will have noticed, I hope with satisfaction, that the figures of houses under construction are very encouraging.

Mr. Gibson-Watt: But the right hon. Gentleman gives very misleading figures to the House. Does he not realise that at the end of 1964 in Wales there were 21,130 houses under construction? Why have the figures dropped so much?

Mr. Thomas: If the hon. Gentleman wants figures he can have some more. In the 13 years when hon. Members opposite were in power—I hope they do not mind my referring again to the 13 wasted years—only in 1964 did they build over 14,000 houses a year.

Mr. Roy Hughes: Will my right hon. Friend take to task all those local authorities, particularly those falling behind, which are now controlled by the party opposite?

Mr. Thomas: I know that my hon. Friend represents one such area where the housing record last year was pitiful.

Mr. Gower: asked the Secretary of State for Wales if he will state the various factors which have led to a reduction in the number of new dwellings built in Wales during the past 12 months; by what proportion current building of new houses differs from production in 1964; and what steps he will take to increase the building of new houses in the future.

Mr. George Thomas: The chief factor is that waiting lists have shortened and demand diminished as a result of the very high rate of building achieved in the last


five years. 18,969 dwellings were completed in 1964. There are 18,500 houses currently under construction. I will take every possible step within my powers to ensure that an adequate rate of building is maintained in the future: it is necessary to do this both to eliminate local shortages and to help with the clearance of unfit houses which have been with us far too long.

Mr. Gower: Is the right hon. Gentleman aware that present output is barely above what it was in 1964, whatever he may say? Is he further aware that whatever figures he may give the House today, the deepest anxiety about the position has been expressed by the architectural and building professions?

Mr. Thomas: We want to build the maximum number of houses according to the maximum need of the community, and we also seek to give attention to the unfit houses that can be brought into a state of fitness.

Mr. Gibson-Watt: Is the right hon. Gentleman aware that his answer confuses itself? First of all, he says there is no demand. Secondly, he says that there are a great number of unfit houses. Is it not a fact that the figures, however he may look at them, are bad and could be a great deal better?

Mr. Thomas: The hon. Gentleman ought to understand that unfit houses need not be pulled down or deserted if they can be put into a proper state of repair. There are many thousands of such houses in Wales that we are determined to restore and provide with modern amenities.

Mr. Fred Evans: Is my right hon. Friend aware that there are many authorities in Wales—I could quote some to to him—which are within easy measurable distance of wiping out their housing lists?

Mr. Thomas: We all know that there has been a radical change in the waiting lists of local authorities and I welcome what my hon. Friend has said.

Development Projects (Compensation Payments)

Mr. Gower: asked the Secretary of State for Wales what steps he will take to ensure adequate compensation for

owners of homes and business properties in Wales, whose premises are affected by development projects, in cases where the effects are of an indirect nature.

Mr. George Thomas: The whole compensation code regarding the acquisition of land and the carrying out of works by public authorities is currently under review. This includes the question of injurious affection to which the hon. Member refers.

Mr. Gower: While thanking the right hon. Gentleman for that fairly encouraging reply, may I ask whether he will treat this matter with a good deal of urgency because many areas in South Wales are subject to this kind of problem?

Mr. Thomas: I am well aware of the anxiety that this problem causes. That is why Her Majesty's Government are giving attention to it.

Oral Answers to Questions — TECHNOLOGY

Motor Industry

Mr. Blaker: asked the Minister of Technology what representations he has received from the Motor Agents Association about the effects of the Government's policies on the motor industry; and what reply he has given.

The Minister of Technology (Mr. Anthony Wedgwood Bean): Representatives of the Association met my right hon. Friend the Paymaster-General and me on 15th October last year and asked for a relaxation of the hire-purchase restrictions on the sale of used cars. After careful consideration of their arguments we felt unable to agree to their request. Since then my right hon. Friend has had three further letters from the Association.

Mr. Blaker: Is the right hon. Gentleman aware that sales of motor vehicles in 1969 fell significantly compared with the previous year and that this situation, if continued, is likely to be damaging to efficiency and exports? Will the right hon. Gentleman represent to his right hon. Friend that if there is to be some relaxation of Government restrictions on this industry it might be wise to have some modest relaxation now when demand is slack rather than wait till after the Budget?

Mr. Benn: I can assure the hon. Gentleman that I am in very close contact with the industry and with my right hon. Friend the Chancellor of the Exchequer, and that the arguments he has put forward are very well understood. But the policy adopted has to have some regard to the general economic framework of policy, and undoubtedly one of the benefits that will accrue from our stronger economic position is a greater degree of security in the industry in the future.

Mr. Howie: Referring to the general economic situation, may I ask my right hon. Friend whether he is aware that the Chairman of Vauxhall Motors has given an undertaking similar to that given by Lord Stokes just before Christmas, namely, that his firm would continue to keep up its record export levels were a relaxation in the home market now permitted? Will my right hon. Friend bear that in mind when discussing the matter with his right hon. Friend?

Mr. Benn: One of the most welcome aspects of the whole story has been that as a result of very close contact between the industry and the Government, the industry has expressed through its principal spokesmen an understanding of the need for exports and has done very well in this respect.

Sir K. Joseph: Will the right hon. Gentleman represent to the Chancellor of the Exchequer that if any concession is deferred till the Budget the public may equally well defer their purchases till then and plunge the industry into worse trouble on the home market?

Mr. Benn: If it were necessary for me to refer passages in HANSARD to the Chancellor I should be happy to do so, but I am sure that he will notice them.

Investment Grants

Mr. Kenneth Baker: asked the Minister of Technology what progress he is making with his study of investment grants.

Mr. Benn: Good progress has been made. The next stage of the study, which involves a direct approach to industry, is to begin very shortly.

Mr. Baker: How long will it take the Ministry to recognise the self-evident fact

that investment grants are wasteful and very expensive? Would it not be more sensible, in order to stimulate investment, to introduce a system of freer depreciation which would stimulate productive and profitable investment?

Mr. Benn: These are old arguments that we have had in the House over quite a period. The hon. Gentleman is saying that we should not have a study at ail but that we should reverse engines on a decision that has been taken. I would point out that a degree of confidence in the stability of Government measures to encourage investment is an essential part of the further growth of investment.

Mr. Barnett: Will my right hon. Friend not exclude from his conclusions, when he gets the report, the possibility of more discrimination in this field so as to exclude giving very large grants to industries and regions which are not using them as any kind of incentive at all?

Mr. Benn: Of course there is a selective element built in in respect of development areas, and undoubtedly the growth of new industry in those areas owes something to that degree of selectivity. My right hon. Friend is now bringing forward a Bill introducing another element of selectivity, in respect of balance of payments tests. I repeat, if any policy is to have its effect, there must be a measure of stability and confidence on the part of industry as to the continuation of it.

Mr. Ridley: But would the right hon. Gentleman not agree that, despite investment grants, investment in manufacturing industry has declined as a percentage of the gross national product over the period of their existence?

Mr. Benn: Such preliminary studies as I have asked for indicate that the investment grants have certainly cushioned what would otherwise have been a more serious fall in investment at comparable periods in the trade cycle. The current investment intentions made available for us show that there is some reason to be confident about the future.

Mr. Bruce-Gardyne: asked the Minister of Technology what is his latest estimate of the aggregate cost to public


funds of investment grants in the current financial year.

The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Neil Carmichael): £590 million, of which provision for £560 million has already been sought. It is expected that the remainder will be sought in a spring Supplementary Estimate.

Mr. Bruce-Gardyne: When investment grants reach the scale of £600 million a year, is it not evident that they are approaching almost the level of a scandal, particularly when so much of the money goes to capital-intensive industries which would probably make the investment anyway? How does the hon. Gentleman justify the prospect of paying out over £90 million to one company in taxpayers' money over the next five years?

Mr. Carmichael: It is expected that, over a period, the investment grants will not cost more and might even cost less than if the previous incentives had been continued.

Sir K. Joseph: Yes, but will the hon. Gentleman go on, despite the criticisms of his hon. Friend the Member for Middlesbrough, West (Dr. Bray) and of Her Majesty's Opposition, paying large grants from the taxpayer to capital-intensive projects with low use of labour to go to areas where they would have gone anyway?

Mr. Carmichael: Whether they would have gone to the areas anyway is extremely doubtful, but the facts are that the investment grant was not primarily intended to increase labour in particular areas. There are other methods of doing that. The investment grant was meant to increase the investment in the area and the efficiency of industry there, and to make the area more competitive with other parts of the country.

Mr. Sheldon: Would my hon. Friend note that many who are in favour of giving investment incentives are particularly unhappy about the effect of this power on the present scheme—that is, that the Government are giving very large sums of money and we cannot see anything like a comparable benefit in return?

Mr. Carmichael: This, of course, was dealt with in the Estimates Committee's

Report and some of it should not be dealt with piecemeal. There will be an official reply by the Department on these points.

Mr. Biffen: asked the Minister of Technology what assessment he has now made of the effect of investment grants on the levels of investment generally and on employment in the development areas; and if he will publish these findings in the OFFICIAL REPORT.

Mr. Carmichael: The effectiveness of investment grants is currently the subject of a special study. Whilst it is not possible to separate the effect of different measures, the development area package has clearly helped to reduce regional disparities in unemployment, notwithstanding the rapid run-down of traditional industries in development areas.

Mr. Biffen: Is the hon. Gentleman aware that he has caused considerable mystification by his assertion earlier that the regional variation of the investment grant was not primarily designed to increase employment? if that is not the purpose, what is the purpose? If there are more sophisticated purposes, may we have evidence that they are being fulfilled?

Mr. Carmichael: I said that it was not necessarily to increase employment. The White Paper on Investment Incentives, in which the investment grant scheme was announced, said that grants would be available whether or not the effects of the investment were to provide employment.

Mr. Mikardo: Has my hon. Friend observed the judgment of the Select Committee on Nationalised Industries in its report on the coal industry that the effect on the development and special development areas of this and other Government assistance measures has been
pitifully slow and pitifully small
and that therefore a rethinking of Government policy is demanded?

Mr. Carmichael: There is a study going on of the effects of investment grants. While investment may have been slower than we would all have hoped, there is no doubt that investment in areas where old industries are running down or dying out is much greater than it would have been had there not been such grants.

Manufacturing Investment

Mr. Bruce-Gardyne: asked the Minister of Technology what is his latest estimate of the probable percentage change in manufacturing investment between 1969 and 1970.

Mr. Biffen: asked the Minister of Technology what is the latest estimate he has made of the expected levels of fixed investment in the manufacturing industries and distributive trades, respectively, during 1970; and if these levels conform to the economic strategy being pursued by the Government.

The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Alan Williams): Information on the levels of investment expected by industry in 1970 was given in the results of the latest Investment Intentions Inquiry issued on 13th January. The expected levels are not inconsistent with the Government's economic strategy, given other claims, particularly those of exports, on resources.

Mr. Bruce-Gardyne: Even if the Ministry's latest forecast should be fulfilled, how does the hon. Gentleman explain the fact that, notwithstanding the glories of the investment grant system, the peak in the rate of growth in the investment cycle on this occasion should be so much lower than in the last two years?

Mr. Williams: The hon. Gentleman would be well advised to study the figures. If he looks at the position of their peak year, which stood out like an iceberg in 10 years of low investment figures, in 1961, he will find that, in the two years following, the decline in the level of investment was nearly 20 per cent., whereas, as a result of the differential rate of investment grant during the period following the 1966 peak, the fall as a percentage of g.d.p. was only from 4·6 per cent. to 4·4 per cent.

Mr. Biffen: Can the hon. Gentleman make it clear that the figures revealed by the latest survey are deemed to be adequate and consistent with the Government's economic strategy, particularly in the light of the Prime Minister's avowed declaration that, after exports, investment was the next priority in the

Government's approach to economic management?

Mr. Williams: The hon. Gentleman will recognise, as both sides have said in the past, that confidence is an import. ant element in determining the level of investment, and the balance of payments priority is therefore an absolutely correct one in establishing that confidence. But the level which is envisaged in the latest intentions survey is above that envisaged in "The Task Ahead".

Oral Answers to Questions — POSTS AND TELECOMMUNICATIONS

Capital Expenditure Programme

Mr. Kenneth Baker: asked the Minister of Posts and Telecommunications whether he will publish the breakdown of the capital expenditure programme of the Post Office for the next three years.

The Minister of Posts and Telecommunications (Mr. John Stonehouse): Yes Sir; with permission, I will circulate the information requested in the OFFICIAL REPORT.

Mr. Baker: I look forward to that, but would the right hon. Gentleman not agree that, if the figures correspond to the White Paper already published, they will show that, by 1972, the Post Office will be the biggest capital spender in the Government, at nearly £2 million a day? In order to reduce this burden, is it not sensible to allow the public and British industry to buy their telephones direct from the suppliers rather than through the Post Office?

Mr. Stonehouse: I confirm that the figures will show an increasing rate of investment, but I certainly do not draw the conclusion which the hon. Gentleman does in his supplementary question. I think that the country generally welcomes the fact that a public enterprise with the initiative of the Post Office is investing money and developing an excellent communications system for Britain.

Mr. Paget: Is there a proposal to devote a little more capital to providing people with telephones? Is my right hon. Friend aware that there is a year's delay in getting one in Northampton?

Mr. Stonehouse: I am not aware of the particular instance which my hon. and learned Friend mentions about his constituency, but of course the waiting list has been drastically reduced. The fact that we are proposing to allow the Post Office to invest this tremendous amount of money in the development of the communications system will illustrate our anxiety to improve that system.

Mr. Bryan: In view of the dominating scale of Post Office expenditure among the nationalised industries, will the Minister give an assurance that the Corporation's accounts will be published in a form at least as detailed as that of the old Post Office accounts?

Mr. Stonehouse: It will be for the Post Office to decide the exact form of its accounts, but we shall, of course, undertake that they will be no less detailed than those of any other authority responsible to this House.

Following is the information:



1969–70
1970–71
1971–72


Expenditure on fixed assets:


Posts and Giro
34·5*
36·9
41·2


Telecommunications
362·4
423·5
448·9


NDPS
6·2
8·2
7·6


* Including 2·7 for the Post Office Savings Bank up to 1st October, 1969.

All figures are in £million at March, 1969 Prices.

House of Commons (Postal Deliveries)

Mr. Arthur Lewis: asked the Minister of Posts and Telecommunications whether he will issue a general direction to the Post Office that they should take steps to ensure that letters and cards, whether first- or second-class postage rates, posted to the House of Commons should be delivered in under four days.

The Parliamentary Secretary to the Ministry of Posts and Telecommunications (Mr. Norman Pentland): No, Sir.

Mr. Lewis: Is it not right that constituents who wish to raise urgent matters which they feel that their Members of Parliament should deal with, should have those letters delivered here as quickly as possible and without delay? Members want to get on with their work and want

their constituents to be assisted in all possible ways. Surely preference should be given to matters like this?

Mr. Pentland: I am aware of my hon. Friend's concern, but I am advised, that, as a general rule, first-class letters and postcards are delivered to the House on the working day after posting and that second-class mail normally takes a day longer. If my hon. Friend has any specific complaints in mind, I hope that he will pursue them with the Post Office.

Mr. Lewis: I have sent details but have had no satisfaction—

Mr. Speaker: Order.

Mr. Lane: Is the hon. Gentleman aware that there has been a steady deterioration in the second-class service, not necessarily only that involving the House of Commons? What steps is he taking to get the Post Office to put this right?

Mr. Pentland: Neither my right hon. Friend nor I have any responsibility for the day-to-day operations of the Post Office. If any hon. Member has complaints of this kind, he should take them up with the Post Office.

Telephone Service (Tariff Changes)

Mr. Kenneth Lewis: asked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office Board that, in re-pricing telephone calls when the sixpenny piece is abolished, they shall not allow the price to rise above its present level.

Mr. Stonehouse: No, Sir, but the Post Office will consult the Users' Council and me before introducing many major tariff changes.

Mr. Lewis: Yes, but is the right hon. Gentleman aware that, since the minimum price, which is equivalent to 6d., would be 1s. If there were an increase of that order, the fact that extra time is given will not help, and that it is absolutely essential that there should be a minimum charge for a minimum time on the telephone for people using public call boxes and so on, particularly those without their own telephones?

Mr. Stonehouse: The Post Office is aware of this and is arranging for the conversion of call boxes to take the 2


new pence piece, which is equivalent to 4·8 old pence. Therefore, I do not think that the fears being expressed about an automatic increase in the minimum rate charge in the call boxes are called for.

Mr. Barnett: Will my right hon. Friend consider making representations to the Chancellor that the sixpenny piece be retained?

Mr. Stonehouse: I am sure that my right hon. Friend the Chancellor, who is an avid reader of HANSARD, will note that point.

Independent Television Companies (Levy)

Mr. Ron Lewis: asked the Minister of Posts and Telecommunications if he will now reduce the levy on television companies, in view of the difficulties which will face broadcasting developments in certain areas.

Mr. Stratton Mills: asked the Minister of Posts and Telecommunications if he will reduce the levy on independent television companies; and if he will make a statement.

Mr. Stonehouse: I have just received the Independent Television Authority's detailed assessment of the effect of the levy on independent television. I am studying its case but I am not yet able to say what the outcome will be.

Mr. Lewis: Is my right hon. Friend aware that some of the smaller television companies, like Border, which operates most efficiently in my constituency, will not be able to go in for full colour programmes unless the levy is halved or taken off? That would deprive my constituents and those in the Border area of an efficient, up-to-date television service. Will my right hon. Friend speed matters up in the interests of the smaller companies?

Mr. Stonehouse: I am dealing with the question as quickly as I can. I received the report on Friday and spent the weekend with it. I am conscious that the smaller companies are adversely affected, but they are also adversely affected by increasing costs and the fact that the income from advertising has not been as great as was expected.

Mr. Ian Gilmour: In view of the right hon. Gentleman's extreme dilatoriness over this matter, which has been becoming increasingly evident over the past few months, will he undertake both to publish the Cooper Brothers' report when he receives it and to act upon it immediately?

Mr. Stonehouse: I cannot understand what the hon. Gentleman means by that supplementary question. I was told by the I.T.A. that it would give me the report as soon as it could. As a result of the very full investigations made by the accountants advising the I.T.A., this took longer than expected. I received the report on Friday afternoon last and spent the weekend reading every word of it. It is a very long report, and it is not yet possible for me, with my advisers, to reach any conclusions about it. The suggestion that there is any delay on my part or in my Ministry is absolutely unjustified. The report is confidential and I could not undertake to release the whole of it.

Mr. Mayhew: Is my right hon. Friend aware that some television companies are a great deal less poverty-stricken than others? This crisis will not be solved simply by cutting the levy. Can we be assured that we shall have full information about the finances of these companies, and that this will be followed by a searching examination of the structure of I.T.V. as a whole?

Mr. Stonehouse: It is true that some companies are not as badly off as some of those worst affected by the factors which I described in answer to another supplementary question. I shall see what information I can provide to the House before we move further on decisions that should be made.

Mr. Mawby: Is the Minister aware that it would be satisfactory to everybody if a searching inquiry could be made into the relationship of different companies and their general profitability? Does lie realise that the extra levy has a tremendous effect on companies such as the one operating in the West Country, and that the only result can be a lowering of standards or a reduction in staff, both of which would be very bad for television?

Mr. Stonehouse: I am concerned that whatever comes out of this examination


will allow independent T.V. to keep the programme standards which it has established, and to improve them where it can.

Mr. Ellis: Does my right hon. Friend accept that, while many of us believe that it is right to clobber the profits, some of the miserable people running television companies are now lowering the standards on the production side, starving their producers so that they cannot put on decent productions? Will he make arrangements to attack the profits but to allow the companies the money for the productions?

Mr. Stonehouse: As I said in answer to another supplementary question, I am anxious that programme standards should be maintained, but I am not aware that there has been any reduction in them as a result of the Chancellor's action last year. Programme standards are being maintained, and I have had assurances from the companies that they will continue to maintain them.

Mr. Bryan: The dangers were pointed out to the Minister from this side of the House over six months ago, and he is only just coming round to making decisions on them. May I have assurances from him that even if the report cannot be published in detail in its original form we shall receive a great deal of the information, because it is clearly the most up-to-date and important information that there is?

Mr. Stonehouse: I shall see that as much of the information as possible is released, but a great deal of it is confidential to the programme companies, and it would be unfair to release the information that they have provided for the inquiry without their agreement.

Post Office Research Team (Report)

Mr. Bryan: asked the Minister of Posts and Telecommunications if he will give the Post Office Board a general direction that an annual report be published on the activities and cost of the recently appointed research team headed by Lord Snow.

Mr. Stonehouse: No, Sir. It is for the Post Office to decide whether to publish such information.

Mr. Bryan: Cannot the Minister at least give us more detailed terms of reference for the activities of that body? Will he make some comment on the statement by Lord Hall that members of it will not even be allowed into the Post Office?

Mr. Stonehouse: It is not for me to comment on the detailed workings of the Post Office. The hon. Gentleman and I served on the Standing Committee which helped to pass the Post Office Act. We went through those labours to establish a Corporation that would get on with the job. We should let it do so, and not interfere in such details.

B.B.C. (Finance)

Mr. Bryan: asked the Minister of Posts and Telecommunications what is the deficit on the British Broadcasting Corporation's broadcasting activities for the year 1968–69.

Mr. Stonehouse: The sum of £5,091,985.

Mr. Bryan: Will the accounts of local radio be kept separate in future? Is it true that the local radio deficit will be about £4 million by the time the licence fee goes up?

Mr. Stonehouse: The B.B.C. will show the details of these accounts in its annual Report and Accounts in the same way as it has produced details in the past, including the figure that I gave in my original reply. I think that it will be able to satisfy the anxieties expressed about expenditure of this kind.

Colour Television Reception (Merseyside)

Mr. Tilney: asked the Minister of Posts and Telecommunications if, so that Merseyside can get adequate three-station reception in colour, he will ensure that the British Broadcasting Corporation and the Independent Television Authority expedite the alterations to the Moel-y-Parc transmitters.

Mr. Pentland: No, Sir. The Moel-y-Parc transmitters which will transmit B.B.C. Wales and independent television (Harlech) programmes are not intended to serve Merseyside.

Mr. Tilney: But since British colour television is so good, is not it natural that


people with colour television sets want to receive colour programmes? Is the Minister aware that many people on Merseyside cannot receive B.B.C. 1 in colour?

Mr. Pentland: The Merseyside area is served from the Winter Hill transmitting station, which broadcasts a colour version of B.B.C. 1, B.B.C. 2 and I.T.V. A local relay station must be built to improve the service to some 90,000 people in Liverpool who cannot receive the Winter Hill transmissions satisfactorily.

Post Office Employees (Pay)

Mr. Arthur Lewis: asked the Minister of Posts and Telecommunications whether he is aware that there are many workers in the Post Office Corporation with take-home pay of less than £12 per week; and, in view of the Government's policy to assist the lower paid workers to increase their incomes, if he will issue a general direction to the Post Office Board that they should increase the pay of their lower paid workers.

Mr. Pentland: The Government's views on low-paid workers are set out in the recent White Paper (Cmnd. 4237) and will no doubt be taken into account by the Post Office and the unions in future pay agreements. No direction is called for.

Mr. Lewis: We want to see the Government taking practical steps to implement their declared policy that it is their intention to help the lower-paid worker. Will not my hon. Friend ask the Post Office to do that by increasing the wages and salaries of its lower-paid workers?

Mr. Pentland: If the Post Office were thought not to be tackling the problem of lower-paid staff in a proper manner, the first remedy would be to refer the matter to the National Board for Prices and Incomes. But the Post Office is considering several pay claims, and we know from informal discussions that careful thought is being given to the lower-paid staff.

International Telecommunication Union

Mr. Moyle: asked the Minister of Posts and Telecommunications what representation his Department has at the International Telecommunication Union.

Mr. Pentland: My Department is represented at all the major conferences and meetings of the International Telecommunication Union held at Geneva or elsewhere.

Mr. Moyle: Can my hon. Friend assure us that he is satisfied that other interested bodies in this country can take a full part in the activities of the I.T.U. as well as his Department?

Mr. Pentland: Yes, Sir. The representatives of private operating bodies such as the Post Office, Cable and Wireless, and manufacturers and scientific organisations may also attend certain meetings of the I.T.U. if the bodies they represent are recognised or approved by my Department.

Captain Orr: Does the Frequency Advisory Committee still exist? If so, when did it last meet?

Mr. Pentland: The Committee still exists but, without notice, I could not give the hon. Gentleman information about when it last met. I will write to him.

Universal Postal Union (Conference)

Mr. Golding: asked the Minister of Posts and Telecommunications what decisions were made at the Tokyo Conference of the Universal Postal Union.

Mr. Pentland: Congress took decisions on well over 1,000 formal proposals, many of which will bring further improvements to the international mail service.

Mr. Golding: Can my hon. Friend tell us whether any decisions were taken on technical co-operation?

Mr. Pentland: Yes, Sir. Steps were taken to secure for postal projects a fairer share of multilateral aid resources; bilateral aid in the form of training will be increased and the work of the U.P.U.'s Consultative Council for Postal Studies will be intensified.

PUBLIC ORDER ACT (SWANSEA TRIAL)

Mr. Fred Evans: asked the Attorney-General what was the cost to public funds of the trial of the nine men accused


under the Public Order Act, 1936, at Swansea during May to June, 1969.

The Attorney-General (Sir Elwyn Jones): The cost to public funds of the prosecution was, in round figures, £23,000 and of the defence £61,500.

Mr. Evans: Does not my right hon. and learned Friend agree that, in a situation in which we are trying to attract industrialists to Wales, such figures and the situation they portray are doing Wales an extremely bad disservice in driving away, through the activities of nationalist extremists, the very people we wish to attract?

The Attorney-General: It is certainly in the interests of Wales that there should be unequivocal support for law and order and that is the best contribution that can be made to the interests of Wales at the present time. This prosecution was brought in respect of serious charges and it was right in the public interest that they should be brought.

CRIMINAL AND CIVIL CASES

Mr. Cronin: asked the Attorney-General if he will take steps to expedite the disposal of the recent accumulation of criminal and civil cases awaiting trial.

The Attorney-General: A number of steps are already being taken to deal with this serious problem. The Government have announced their acceptance in principle of the recommendations of the Royal Commission on Assizes and Quarter Sessions, including the Commission's proposals for the action needed in advance of legislation. Under the Administration of Justice Bill, now before Parliament, it will be possible to make better use of the judges' time by reducing the number of places at which assizes are held. A review of court accommodation throughout the country has already been put in hand with a view in particular to the provision of new courts at those places where they are urgently required.

Mr. Cronin: Does not my right hon. and learned Friend agree that the delay in cases being brought to trial is so serious as to constitute in many cases the denial of the justice which British

citizens normally expect? Will he consider appointing more judges as an emergency measure and also streamlining court procedures, particularly with regard to personal injury cases, which occupy about three-quarters of the civil list?

The Attorney-General: The delays in bringing cases to trial are serious. We are seeking to tackle the matter by taking early steps to implement the Beeching Report. The main difficulty is in regard to accommodation and in respect of that also the action I have mentioned has been taken. There have been a number of commissions and committees dealing with recommendations for expediting proceedings and simplifying procedures, but it is a complex matter.

Sir D. Renton: Can the right hon. and learned Gentleman give an up-to-date figure of the number of cases awaiting trial in the High Court compared with a year ago?

The Attorney-General: I do not think that I can give that figure without notice, but the situation has been aggravated by the increase in the number of writs issued last year in the Queen's Bench Division, from 77,000 in 1968 to 96,000 in 1969.' The number of criminal appeals lodged increased from 8,800 in 1968 to 9,700 in 1969. This is the nature of the problem we are meeting.

Mr. Doughty: Is the right hon. and learned Gentleman aware that the vast majority of criminal cases tried on indictment are tried at quarter sessions, which are well up to date in their work and where there is no delay?

The Attorney-General: That is true by and large but there are delays there now, I am afraid.

Mr. Carlisle: Is the right hon. and learned Gentleman aware that, in the North-West, the accumulation in civil cases has been growing alarmingly as a result of the fact that most of the time of judges is taken up in dealing with crime while they are on assize there? Would he consider the appointment of a permanent civil court in the North-West as a matter of urgency?

The Attorney-General: This is one of the suggestions now being considered.

Oral Answers to Questions — CIVIL SERVICE

Superannuation

Mr. Boyd-Carpenter: asked the Minister for the Civil Service what changes he now proposes to make in the pension arrangements of the Civil Service to accommodate the Government's proposals for national superannuation following discussions with the staff associations.

The Minister Without Portfolio and Deputy Leader of the House of Commons (Mr. Peter Shore): Discussions with staff associations will cover many aspects of Civil Service superannuation. It is much too soon to expect them to have reached conclusions.

Mr. Boyd-Carpenter: Does not the right hon. Gentleman realise that that makes things very difficult for hon. Members who have to consider a Bill dealing with this matter today? Can he not at least give a firm and clear assurance that there is no question of going back on the civil servants' non-contributory pension to make room for a contributory national insurance pension?

Mr. Shore: We have gone over these matters in the House and there will be further opportunity later today. But I repeat to the right hon. Gentleman what has already been said to him a number of times—that, in our judgment, when one combines the new State pension scheme with the occupational benefit which civil servants at present enjoy, they will, over all, be better off than previously.

Medical Aid Association

Mr. Boyd-Carpenter: asked the Minister for the Civil Service whether he will withdraw facilities from the Civil Service Medical Aid Association.

Mr. Shore: No, Sir.

Mr. Boyd-Carpenter: While thanking the right hon. Gentleman for that wholly satisfactory answer, may I ask whether it carries the implication that he totally rejects the doctrine of the Secretary of State for Social Services that such associations involve queue-jumping and are an unhappy element in the National Health Service?

Mr. Shore: I must disappoint the right hon. Gentleman there. He can infer no such thing from my reply. My right hon. Friend the Secretary of State for Social Services went out of his way to make it clear that he was neither seeking to encourage nor to discourage these schemes. [HON. MEMBERS: "Oh."] He was seeking to make it plain that private insurance schemes offer no solution to the financial problems of providing a decent National Health Service for all our people.

Mr. Pavitt: Will my right hon. Friend reconsider his answer in view of his latest remark? Should not only this plan but B.U.P.A. and other plans in other Ministries be revised?

Mr. Shore: I had better make it plain to the House that the scheme which has been referred to was introduced for civil servants in 1929 and therefore long antedated the National Health Service. The amount of encouragement or assistance which is given to the scheme by the Government is really minimal.

Mr. Patrick Jenkin: I am glad to see that the Secretary of State for the Social Services has joined us. May we take it that the determination of the Government not to interfere with this valuable scheme for civil servants is a flea in the ear for the right hon. Gentleman?

Mr. Shore: It is, again, no such thing, but I will leave it to my right hon. Friend himself to deal with this and other points later today.

WALES (LLUEST WEN RESERVOIR)

Mr. G. Elfed Davies: (by Private Notice) asked the Secretary of State for Wales whether he will make a statement relating to the emergency created by the discovery of a defect in the dam of the Lluest Wen Reservoir above Maerdy, in the Rhondda Fach Valley.

The Secretary of State for Wales (Mr. George Thomas): This reservoir, which was built in the late 1890s and contains 242,000,000 gallons, has a dam of earth construction with a clay core and does not incorporate separate arrangements built into reservoirs of later date to release water as necessary into the river course.
On 23rd December a small area of the surface at the top of the dam collapsed under the weight of a horse and rider and revealed a cavity. The water board immediately called on its consultants and its representative examined the dam on 1st January. They decided that further investigations were necessary, but there were no indications at that stage that the dam might be in a critical condition.
Observations were maintained, and on 12th January the continuing appearance of leached clay in a narrow tunnel carrying the water supply pipe through the base of the dam, and the completion of calculations by the consultants, led to the conclusion that the water level in the reservoir should be reduced by about 30 ft, and, also, that warning arrangements should be provided in case of failure of the dam. The water board called on the fire service to help with the first and the police to provide the second.
Since that time work has proceeded round the clock to reduce the level of the water to eliminate danger and enable the exact nature of the defect to be determined and remedied.
The House will wish to know the latest information about progress. I received a report at 3 p.m. today that the level had dropped by 16 ft. 3 in. The engineers consider that it must fall by 30 ft. in all before all danger is eliminated.
The first question which may be asked is whether the statutory provisions relating to the safety of reservoirs need to be strengthened. The responsible Departments, including my own, are already examining the existing statutory provisions with this purpose in mind. Last Friday, my Department wrote to all water undertakings with reservoirs in Wales asking them to make a special inspection of any reservoirs of similar construction, built before 1930, which they own, and to report within seven days. The letter called particular attention to the need to ensure that there is access to the dam capable of taking heavy vehicles and equipment if a critical condition developed. That is an important lesson of the Lluest Wen incident.
The House will wish to join me in paying tribute to the many organisations and individuals, too numerous to men-

tion individually, who, through day and night, under difficult weather conditions, have worked at full stretch to effect a successful outcome. Meanwhile, danger still exists and the engineers hope that the water should be reduced to the required level by Wednesday night.

Mr. G. Elfed Davies: The House, I am sure, will be relieved by the reassuring news given by my right hon. Friend about the present situation. May I take this opportunity of thanking him and his Department for the prompt measures they took once the danger was imminent?
On behalf of the Rhondda people, may I express their gratitude and mine to those countless people who have given of their services tirelessly day and night, often in atrocious weather conditions, to prevent this position worsening? To those of my constituents who have faced this problem for many days and nights of anxiety and of fear, I should like to express my sincere sense of pride and admiration for the traditional manner in which they have faced this terrific problem.

Mr. Speaker: Order. Questions, even on a Private Notice Question, must be reasonably brief.

Mr. G. Elfed Davies: Is my right hon. Friend aware that the pride and admiration of all people is with them for the manner in which they have faced this difficulty?
Finally, may I ask my right hon. Friend whether, in any measures which may be taken as a result of this experience, high priority will be given to the establishment of access roads, a difficulty which in this instance has proved to be a barrier to swift action being taken?

Mr. Thomas: My hon. Friend was in Maerdy all through Monday night, as was the Parliamentary Secretary who is standing by on duty there today. [Laughter.] If the people of Maerdy, with the anxieties they have known this week, could see the amusement of hon. Members opposite, they would be shocked. The question of access to these dams is a priority with us.

Mr. Gibson-Watt: Will the right hon. Gentleman accept that on this side of the House we extend every sympathy to all


those—[HON. MEMBERS: "Oh!"] I repeat, we extend our sympathy to everybody in this valley who has been affected by this incident, which has caused great anxiety to a vast number of people. The weather has been very bad and the difficulties have been immense. The problems which the Welsh Office has had to face have been very considerable and we appreciate that. There are two points which I wish to put to the right hon. Gentleman.
As the Minister responsible for water in Wales, does he consider that his present powers are adequate to deal with the situation? Secondly, as he admitted that the danger is not yet over, will he be prepared to come back to the House to give a further report if necessary?

Mr. Thomas: In answer to the second question by the hon. Member, if necessary, certainly.
In answer to the first question, before this anxiety arose we were already examining legislation. If the provisions of the 1930 Act need to be strengthened we shall take the necessary action.

Mr. Howie: May I add to the expressions of sympathy from hon. Members on both sides of the House? In considering the 1930 Act, what attention has been paid to the report on reservoir safety published by the Institution of Civil Engineers in 1966? Does my right hon. Friend feel that there is a need for speedy action on the several recommendations contained in that report?

Mr. Thomas: That report is one of the factors which we have been considering.

Mr. Thorpe: In associating myself with congratulations to all the public authorities and Departments involved, may I ask the right hon. Gentleman one question? Since this defect was apparently brought to light by a man, I understand he said, on horseback, does not this indicate the need to keep people away from all other reservoirs until the results of his inquiries have been completed?

Mr. Thomas: I understand that all necessary steps are being taken.

NIGERIA

The Prime Minister (Mr. Harold Mr. Harold Wilson): With permission, Mr. Speaker, I should like to make a statement on the situation in Nigeria as it has developed over the past 10 days. I apologise for its length, but it covers a great deal of important ground.
I am sure that all hon. Members, whatever view they have taken about the rights and wrongs of the Nigerian war, will join in heartfelt relief that the fighting and bloodshed has now ended. [HON. MEMBERS: "Hear, Hear."]
Secondly, I feel there will be widespread relief that the end, when it came, was the result of a decision to end further resistance and that the issue did not have to be fought out to the last remaining acre of the area which, up to last Saturday week, was controlled by Colonel Ojukwu.
And, thirdly, I believe that most hon. Members will share the general recognition that the end of the fighting has been marked on both sides in Nigeria by a strong desire not only that the issues which have so sharply divided Nigeria should be regarded as a thing of the past, but that all concerned should turn their backs on the past in a new era of reconciliation and reuniting of old comrades one with another.
In this connection, I know that very many, if not all, hon. Members will join with me in paying tribute to the magnanimity in victory of General Gowon, including what we have seen on our own television screens—the warm acceptance back into the fold of many of those who have played a leading part in the fighting on the other side; and in feeling that these public demonstrations are not an empty gesture, but represent a sincere desire for unity.
If this is no surprise to me it is because I was convinced on my visit to Nigeria last year of the complete sincerity of General Gowon in what he said to me about what his attitude would be once the fighting had stopped.
It is in this context that the House can form a judgment on the anxieties and fears expressed a week ago—and I know how sincere these anxieties were—that the end of the fighting would be marked


by reprisals and victimisation, involving the deaths of many innocent people.
It was the existence of these fears, and not belief that they were justified, that led Her Majesty's Government, together with others, to join in the establishment of some independent means of verification of what actually happened when areas previously controlled by Colonel Ojukwu came under the control of the Federal forces. Since the late summer of 1968, for 17 months, a team of impartial international observers, set up by the Federal Government themselves, each of them carrying the fullest confidence in his own country, have had every facility for seeing Federal troops in contact with Ibo personnel, Ibo refugees and Ibo civilian population in areas they have occupied. Their reports, which are in the Library of the House, speak for themselves.
I think that the House will be ready to accept further that such evidence as has already reached us over the past week has shown that the clear orders of General Gowon have been carried out in the period since the fighting stopped. Lord Hunt was reported last night as having said, and has confirmed to me after his visit this weekend to the forward areas, that he has seen and heard of nothing which would justify the fears to which I have referred.
From the moment the fighting ended it was clear that the emphasis must be on the provision of food and medical supplies. We immediately offered the Nigerian Government any help within our power; the President of the United States and I conferred on this matter over the telephone; and I asked my hon. Friend the Joint Under-Secretary of State for Foreign and Commonwealth Affairs, who was in West Africa, to go to Lagos, where he was at once received by General Gowon and discussed how we could best help. He had already seen U Thant in Yaounde.
Although the facts on the ground were very far from clear, and did not, in fact, begin to clarify until a day or two later, it seemed clear that the relief problem was not so much that of supplies within easy reach of the affected areas, but of transport for getting it through. It began to emerge that the worst hit areas were around Gwerri, Orlu and Uli.
It was known that 13,000 tons of relief supplies were available within Nigeria and a further amount up to 10,000 tons in neighbouring countries. It was also known that a substantial part of the food supplies in Nigeria had already been moved up into the forward areas by the Nigerian Red Cross in the wake of the advancing troops.
It became clear, therefore, that the immediate problem would seem to be that of road transport, and as soon as this became possible, river and coastal transport within Nigeria. It was no longer mainly a question of getting supplies into the enclave by air, since once we could be sure that the fighting had stopped, and that the roads were clear, we could rely on the fact that by far the most effective means of moving the food and other essentials into the area would be by road, and, as I have said, later, by water transport.
We had, of course, at that stage, no evidence about the conditions of the roads and bridges. But lest there should be a problem here we offered, within hours of Saturday night's news, the services of units of the Royal Engineers should these be required, to repair roads and bridges, and, should this be necessary, airfields. In the event, this offer was not taken up. By Tuesday we had been informed that the main road from Port Harcourt to Umuhia was clear for 24 hour traffic, and that although a vital bridge had been destroyed on the road from Aba to Owerri units of the Nigerian Army had already repaired it.
While I believe that the roads and rivers present the best and quickest means of getting supplies in quickly, there may be some instances where air transport will be needed and this is also something which the Nigerian Government is looking at. I hope to hear further from Lord Hunt on this matter.
While there was inevitably a considerable amount of confusion both about the real needs of the area, and the best means of dealing with these needs, there was no assurance that the fighting would stop after the events of Saturday night. I thought it right to have ready a Hercules of R.A.F. Air Support Command loaded with 10 tons of standard medical equipment. We had already asked the Federal authorities for their


precise requirements in terms of medical supplies.
The fact that the aircraft did not take off when we were ready to send it has been the subject of some comment. All I would say is that I would rather have had it ready in case it was needed than get an urgent request and be forced to spend valuable hours on getting the supplies ready for despatch.
Nigerian requirements were discussed with the Nigerian authorities in Lagos and our High Commissioner was furnished with a confirmed list of urgent requirements for medical supplies, transport equipment, doctors and nurses and we were further requested that these should be sent by civil aircraft.
Lord Hunt, whom I asked to go to Nigeria at the earliest possible moment to help in assessing what further assistance was needed, was having a further meeting this morning with the Nigerian authorities to receive a further statement of requirements, and these will be met, as were the requisitions we received last week.
On the question of relief supplies and administration, I understand the anxiety of many hon. Members and many others in this country, as well as other Governments and relief agencies all over the world, and their urgent desire to go and provide the help that is needed. But the House will know that the Federal Government made a clear decision that all aid should be furnished through the Nigerian authorities and the Nigerian Red Cross, and this was supported by the International Committee of the Red Cross. This is, I think, the answer to the many agencies and individuals who, impatiently and understandably, wanted to get through on their own by flights across Nigerian territory into Uli.
It has been the purpose of Her Majesty's Government as far as relief supplies are concerned to ensure three things, and this process began nine days ago. First, to work with and through the Nigerian authorities, with the help of the relief agencies, to ensure the movement of supplies in an ordered but urgent way. Secondly, to use our influence through our discussions with Governments in all parts of the world to ensure that whatever was needed was available; and, thirdly, to ensure that British organi-

sations best able to help were kept in close touch with Her Majesty's Government and the precepts upon them centralised through our own contacts with the Federal Government.
We were also determined to see that whatsoever might already be on the ground in Nigeria the relief operation should not be held back for one moment through fears either about supplies or money. This was one of the issues I discussed with President Nixon during my telephone conversation with him last Sunday night and subsequently.
The House will have noted the announcement of Her Majesty's Government last Tuesday that we had decided to make available over and above our normal aid to Nigeria up to £5 million in cash or in kind to meet urgent needs for relief and rehabilitation, and I made it clear to the British relief agencies last Tuesday that any of them having a call for help should not feel themselves precluded by lack of resources from responding, but should feel able to call on the Government for help. Supplementary Estimates will be presented to the House as soon as possible and in the meantime advances will be sought from the Civil Contingencies Fund if necessary.
There have been many estimates of the numbers of people in the enclave, including refugees who have fled from the enclave, in urgent need of medical assistance or of food. Some estimates have been greatly exaggerated and have gone far beyond the total number of human beings in the area; though as I said last Monday night on British television, while that might be so, Her Majesty's Government were not disposed to underrate the gravity of the situation and the numbers who were, nevertheless, in real need.
Some of these were already being cared for by the Nigerian Red Cross, and by Federal troops, as a result of the occupation by the Federal troops of a substantial area in the South East of the enclave earlier this month. Others have been receiving assistance throughout last week. The present position is that 13 tons of British medical supplies specifically requested by the Nigerian authorities have already been flown from this country and we await Lord Hunt's recommendations about what further drugs or equipment are needed. All available civil


charter capacity has been engaged in a continuing operation to air-lift 50 Land-rovers and 62 trucks to Nigeria. Over 30 vehicles have already gone.
The quota of 15 doctors and 20 nurses the British Government have so far been asked to supply is being quickly filled, thanks to the magnificent help the Government have had from the relief agencies. Twenty have already left for Nigeria or will be leaving later today, and the remainder should be there in the next few days. All these will be completely financed by the British Government.
Lord Hunt, whom I asked to go to Nigeria last week, together with the Director General of the British Save the Children Fund and the Deputy Director General of the British Red Cross, has already informed me of the results of his discussions with the Federal authorities, and his two-day visit to the forward areas. One serious problem is the situation in some of the hospitals and particularly the care of war wounded and children. This has arisen partly because of the flight of some medical staff. The number affected is not large as a proportion of the whole population. None the less, the human suffering is very serious. I am glad to say that, wherever cases have been identified, the Nigerian Red Cross is reported to have acted with energy to bring immediate help. Sir Colin Thornley and Mr. Hodgson, who have gone on separate missions to these areas, have not yet returned to Lagos.
I realise that nothing that has been done, either by the Nigerian authorities, including their relief agencies, or by Her Majesty's Government, will fully allay the anxieties of hon. Members about the condition of many of our fellow Commonwealth citizens who are still on the margin, and, tragically, many of them within the margin, of starvation. For that reason, I propose to ensure that as further information becomes available the House will be told.
But at least I hope that the response of General Gowon and his colleagues, and, in particular, his public reconciliation with Colonel Effiong and Sir Louis Mbanefo, and the lead given by them, will encourage the House, indeed the world, about the desire of all concerned to work together to save human life, and, in a

wider sense, to approach the problems of Nigeria, and not least its Ibo population, in a spirit of reconciliation. Should further reassurance be needed I would find it in the reports of reconciliation within Army units of former comrades who, for two and a half years, have been engaged in bitter conflict. I would find it, too, in the reports of Federal doctors and nurses and Ibo doctors and nurses, of social workers, and troops, working together in hospitals and townships as though they had never been in conflict.
But there is still a long way to go. The full extent of the problem cannot be known until those who have fled into the bush have returned. I want the House to know that whatever the extent of the problem, Her Majesty's Government will continue to play their full part in meeting with humanity the needs of people who, for reasons outside our control, have already suffered far too long.

Mr. Heath: The House is grateful to the Prime Minister for making a detailed statement about the action which the Government have taken. We on this side—and, I think, the whole House—welcome the action. We share the view that it was absolutely right to go through the Federal Government in Lagos rather than try to force the issue outside it, as some have suggested and some have tried, and also to work very closely with the voluntary bodies in this country.
May I ask the Prime Minister whether any requests have been made from Lagos which the Government have not yet been able to meet? Secondly, in connection with the stocks of food and supplies which are in the hands of organisations for which the Federal Government are not prepared to approve entry into Nigeria, is it possible for these stocks to be taken over by any other voluntary organisation, such as the British organisation, of which Lagos would approve, and then brought speedily into Nigeria?

The Prime Minister: I thank the right hon. Gentleman for what he has said.
In reply to his first question, whether there have been any requests from Nigeria that the Government have not been able to meet, the answer is "No, Sir". As I have said, Lord Hunt was meeting the Nigerian authorities this morning and was, I think, due to receive a further list of requirements. We shall examine them


urgently and see that, one way or another, they are met, although I am not at this moment in a position to say what will be in that list because we have not received it.
On the right hon. Gentleman's second question, it is certainly, I think, the desire of all the relief agencies, and, I am sure, of the Federal Government, that not one life should be risked by the denial of supplies. The question of a certain degree of ingenuity in moving supplies around from one relief agency to another would certainly be high on the agenda if this became necessary.

Mr. E. L. Mallalieu: Is my right hon. Friend aware that after nearly a week of intensive search, ending yesterday, in Nigeria, I failed to find any evidence of a desire of people, in high places or low, to have revenge against the former rebels? Is he further aware that already the Federal Government of Nigeria has offered to reinstate the former civil servants of the Eastern Region who may have been in rebellion during the last few years?

The Prime Minister: I am grateful to my hon. and learned Friend for confirming from his own observations—and perhaps he is the only hon. Member of the House in a position to do that at this moment—what has been reported to us and what has been reported, also, by a number of non-British representatives. I think, for example, of representatives of the Red Cross. I am sure that what my hon. and learned Friend says is the case.
With regard to the higher civil servants, other officials and military personnel in that area, one of the encouraging things is the extent to which they are working, either in the area affected or in Lagos, in close harmony with their former Federal colleagues.

Mr. Thorpe: Is the Prime Minister aware that we share his relief that this ghastly war has at last ended so suddenly and, I freely admit, to some of us, so unexpectedly quickly? Is he further aware that we welcome any efforts of Her Majesty's Government to preserve human life in Nigeria?
If it is not yet possible to assess the number of refugees in need of aid, can the Prime Minister say what is the extent of the geographical area where Federal

troops and, therefore, relief agencies, have not yet been able to make contact?

The Prime Minister: As I have said, there was some difficulty in the first day or two because of the sheer black-out of information and it was not until the fighting stopped—that meant the statement by Colonel Effiong, in the first place, and then the order by the Federal commanders that the advance should cease and the police take over—that we began to get any real picture of the situation on the ground. To the extent that the military are able to withdraw and the police take over, this will speed the sources of information to the Federal authorities and, therefore, to ourselves.
With regard to the areas which are believed to be most affected—I think they were the three I have mentioned, Uli, Orlu and Owerri—already a great deal is going on over a great part of that area, but we are still worried about one or two sectors within that area. It is impossible yet to quantify the figures, but the right hon. Gentleman will have seen estimates of the numbers who might be affected.
It is, I think, fair to say that of the number who might be affected—we can only guess what happens until people come back out of the bush when their confidence returns—something like one-fifth of those are probably in urgent need of supplies, the rest being in need of supplementary relief.

Mr. Barnes: Can my right hon. Friend say how many tons of food have gone into the area from Uli and Orlu, where so many people congregated since the Joint Church Aid airlift stopped just over a week ago? Has Britain made any offer of civilian planes to the Nigerian Government to fly food over the same period into Uli airstrip, which, it appears, can be made operational very quickly?

The Prime Minister: I could not at this stage answer this question. When I have further information from Lord Hunt which helps to clarify the situation, I will be ready to make it available to the House as quickly as I can.
We have made it plain to the Nigerian Government that we shall be ready to supply aircraft or anything else at the earliest possible moment. With regard to the question of the possible use of Uli airstrip, I refer my hon. Friend to what I said in my original statement.

Mr. Hugh Fraser: Could the right hon. Gentleman give us an estimate of the numbers involved? Would he refer to the statement which has been made by the Rev. Mr. Somerville, of the Church of Scotland, who left Uli last Saturday, who produced figures to show that on the Protestant side nearly 3 million people were in urgent need of relief and that on the Catholic side of Joint Church Aid there was a similar figure? This is the problem which worries the House of Commons—that there are something like 4 million people in urgent need of relief.

The Prime Minister: I think that it is quite impossible to form an authoritative estimate even nine days after the reverend gentleman in question had left the area concerned. Certainly, all the information available to me, to the Nigerian authorities, to the Red Cross, to the international agencies, to Lord Hunt, suggested that the figure is very much smaller than that. As I said, some of these estimates, including those of the right hon. Gentleman, look as though they transcend the total number of human beings in the area.
But that is no reason for complacency, as I said a week ago. The fact that some estimates have been exaggerated, no doubt from the best of motives, is no reason for complacency about the much smaller number who are still at risk and whose suffering is very great. We are waiting to get more information, but I would feel that the figures are very much smaller.
I would be guided by the information which Lord Hunt was able to assemble with others in the area this weekend. While the numbers are smaller, one of the big problems is that of the hospitals and of the children and of the care of war wounded. The other problem not yet measurable is what we shall find when some of those who have taken to the jungle areas return, as I hope they will, to the more populated areas.

Mr. Alexander W. Lyon: Would my right hon. Friend not agree that it was a very wise precaution of the Nigerian Federal authorities to keep overall control of the relief situation, since the cause of this war was the genuine if unjustified fear of the Ibo for their lives and security if they were under Nigerian control, and that, therefore, the best way of dispelling that fear was by the

Nigerians themselves to see that relief reached the Ibo?

The Prime Minister: It was in accordance with what General Gowon has said on a number of public occasions, and what he said to me when I was there last March, in the very clearest terms, as I reported to the House, and it is clear that those assurances are being fulfilled. It was not, however, only a question of the view of the Nigerian authorities in this matter. This was, before the fighting ended, I think I am right in saying this, endorsed by the I.C.R.C. and then by the League of the Red Cross Societies as being the best way of dealing with this problem. At the same time I am certain that the Nigerian Government and the Nigerian relief authorities know that if any aspect of the task, whether of supplies or any other, gets beyond their capacity locally, they have only to ask us and other friends and those requirements will be met.

Mr. Fisher: Now that the bipartisan policy of the Government and of the Opposition Front Bench has been so clearly vindicated will the right hon. Gentleman unite the whole House, as, in a sense, he has already done, including the right hon. Gentleman the Member for Devon, North (Mr. Thorpe) and my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser), I am quite sure, in using our influence in Lagos to ensure that British and international relief on a large scale is quickly made available in an acceptable form to the Nigerian Government?

The Prime Minister: I agree with the opening words of the hon. Gentleman. I think that the best comment on that thought was made by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs in a broadcast programme less than 24 hours after the events of the week last Saturday, when he said—he was asked this very question—that while he felt that the policy had been vindicated it was time now to turn back from the past and to look to the future and the problem of relief; and I hope that this will be the attitude of the whole House.
With regard to the second part of the hon. Gentleman's question, he will be aware from my original statement that I am aware of the point he has put.

Mr. John Mendelson: While there will be widespread support for the attitude adopted by the Government since the end of the fighting, including the way in which the Joint Under-Secretary of State for Foreign and Commonwealth Affairs handled the matter when he was in Lagos, will my right hon. Friend also accept that there are, as he has said, very genuine anxieties felt by a large number of people in this country that the attempt centrally to get relief to some of the areas where the conflict continued near to the end is not satisfactory?
When the Prime Minister says that he has informed the Government at Lagos that if they wish we would supply civilian planes for relief quickly, from the close association of the Government with the Government of Nigeria, throughout the last few years of the conflict, we have the perfect right to say more than that and to press the Nigerian Federal Government to allow us to fly food into those areas so that there should be no hold-up on the roads.

The Prime Minister: I think that my hon. Friend has shown by his reference to my own statement and the answer I have already given that I am fully aware of these anxieties. That is the reason I spoke in the terms in which I did. It is, of course, as I say, a fact that the preparation for this very sudden collapse of the fighting was preparation in advance to move food up into those areas. I think that the Nigerian Government are well aware that if they need aircraft from us or others those will be supplied without difficulty.

Earl of Dalkeith: Would the Prime Minister give an assurance that he will take positive steps to try to prevent a tragedy such as there has been in Nigeria from ever happening again in the Commonwealth by taking the initiative with his fellow Commonwealth Prime Ministers to create a combined peace-keeping force of a fire brigade nature which can go into action in a situation of this kind, as could have happened two years ago, and so saved 2 million lives?

The Prime Minister: The noble Lord is entitled to his views on this, but there will be time for the House and all hon. Members to draw their own conclusions about the history of the last two and

a half years when more information becomes available, as assuredly it will.
While we were prepared, and, indeed, took the initiative two years ago, when I spoke to the Prime Minister of Canada, to get a peace-keeping force or an observer force, if required, it could not have stopped the war from breaking out. It could only have been the means of helping both sides if both sides accepted a cease-fire and a cessation of arms shipments and the rest.
The noble Lord will be sufficiently aware of the nature of the Commonwealth countries to know that they are independent, and that the Commonwealth has no power, whether in a Prime Ministers' meeting or by any other means, to force troops into any Commonwealth country by invasion, any more than we would be likely to do in Australia, or New Zealand, or Canada, or, indeed, if it were proposed—though hon. Members in one part of this House might welcome it—in the case of Northern Ireland.

Mr. William Hamilton: Could my right hon. Friend say what is the purpose of U Thant's projected visit to Nigeria and whether the Government are intending to co-operate in that effort? Can he further say what part the Government are to play in the solution of the massive problems of reconstruction in Nigeria which are bound to occur during the next few years?

The Prime Minister: Yes. I am grateful to my hon. Friend. We were in close touch with the United Nations and with U Thant from the Saturday night, and that was one of the things I discussed with President Nixon within an hour or two of the news becoming known. My hon. Friend the Under-Secretary of State discussed it with U Thant at Yaounde. Since he was in West Africa it was natural that he would want to discuss the whole situation, which is of world concern, with the Nigerian authorities. Throughout the past two and a half years he has taken the view, as I have reported to the House many times, that it was not a matter for United Nations intervention, but that this was an internal matter. That is not in question.
On the question of aid, there have been discussions already between Her Majesty's Government and the Nigerian


Government, ahead of all this happening, in relation to the long-term aid for reconstruction and rehabilitation, quite apart from the urgent relief aid. Even before the end of the fighting we had agreed with them on some further expenditure on aid from our normal aid programme.
The £5 million is quite separate from the £7½ million which I have said we expect to spend on normal development and rehabilitation aid to Nigeria next year. We have already agreed on a substantial aid programme in relation to transport and other equipment needed for rehabilitation. We made an offer of £1·1 million for this in the autumn of 1968, and orders have been placed on this and are now being delivered.
Another offer of up to £1 million for this purpose has been made, and discussions on this are currently taking place in London with Nigerian officials. A further loan of up to £1·7 million for reconstruction is also being discussed. I want to make it quite clear that the £5 million has nothing to do with the £7½million per annum on the aid programme basis.

Mr. Cordle: On contingency planning, is the Prime Minister aware of the importance of a new broadcasting network for Nigeria? The present system is outmoded and is unable to meet modern requirements.
Further to his wholly justified tribute to General Gowon this afternoon, I am sure he will agree that it would give immense pleasure to many people in this country and to Nigerians throughout the world if, at the appropriate moment, General Gowon were invited officially to visit this country.

The Prime Minister: In reply to the first part of the question, the £1·1 million reconstruction aid to which I referred, which was offered in the autumn of 1968, included, in addition to railway spares and materials, telecommunications equipment. It must be for the Nigerian authorities to decide where their priorities lie within an aid programme of this kind.
In reply to the second part of the question, General Gowon has known for a long time that he would be welcome in this country. We were hoping to

welcome him a year ago for the Prime Minister's meeting, but, for reasons which we all understand, he had to cancel the visit at the last moment. I imagine that he will be busy for a considerable time ahead, but, as soon as he feels able to come, I am sure that he will be welcomed in this country. Meanwhile, he will be very welcome on our television screens.

Mr. Dalyell: Has any request been received on the related problem of resettling the tens of thousands of troops in the Federal Army? In particular, perhaps we could offer technical training through our own forces on a kind of Op Mace operation?

The Prime Minister: My hon. Friend will know that Lord Hunt is well aware of what can be done in the matter of technical training. Already offers have been made in relation to the technical training of Nigerian troops, or of many of the troops who may be demobilised. It is for the Nigerians to say what they require in this as in other matters.

Mr. Tilney: Will the Prime Minister state that, despite our liberal record in granting political asylum, such, if requested, would not be granted to Colonel Ojukwu?

The Prime Minister: That is an extremely hypothetical question.

Mr. Dickens: Is the Prime Minister aware that, whatever differences one may have had with the Government over the morality of supplying British arms to Nigeria, in view of the impressive account which he has given to the House this afternoon of the Government's endeavours to supply relief, there can be no doubt that he and the Cabinet have been proved substantially right in their estimate of this matter and their critics wildly wrong?

The Prime Minister: I thank my hon. Friend for the extremely generous statement which he has made, and I will match it by saying that I have never been in any doubt, as I said in the debate in December, about the sincerity of hon. Members in any part of the House who took a different view from ours. What has been done has been justified. I felt, if my hon. Friend will permit me to say this, moderately reassured by a statement that came from what was described in The Times last week as "a high Biafran


source" that confirmed what I hoped was true and have had evidence about, that the deaths—what the writer of the article calls and I do not call massacres—ended after my discussion last year with General Gowon.
This seems to have been confirmed now from authoritative sources. That means that General Gowon's undertakings in this matter, information on which I gave to the House last year, once again have been fully carried out.

Mr. Crouch: A few weeks ago before the war ended the question was raised of helicopters being used to help Biafra. The Government, in considering this matter, gave the impression that the proposal was turned down on the ground of cost. Will the Prime Minister assure the House that he has no such limitation in his mind regarding aid and food at this stage?

The Prime Minister: I would not accept the strictures of the hon. Gentleman on the results of our study. I had called for a report on this some time before the last debate, when the proposal was put forward with great authority by the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home). We had also had the results of the feasibility study done by the United States following a proposal by a group headed by the former Vice-President Humphrey.
While cost was, of course, featured in the report, the reason this was not pursued was the sheer feasibility of the problem, not the cost. At that time the big argument was about daylight flights. We have always said that the best way is road, river and coastal shipment and, secondly, daylight flights. But, of course, daylight flights, still less helicopters, no longer became the issue once it was not necessary to lift food over a battle line, which was why the night flights were being pressed.
In reply to the last part of the question, by the ready response we have made to every request, still more by our own initiative in offering the £5 million in addition to the £7½ million which we were expecting to give, it will be seen that considerations of cost are not entering into our response to the problem in Nigeria.

Mr. Snow: In the aftermath of the war, when the Government have taken all the necessary steps which they propose, will the Prime Minister consider holding a searching inquiry into the rôle—some would say the sinister rôle—of public relations organisations?

The Prime Minister: That is a question which may occur to many hon. Gentlemen. I found, for example, this week that the head of the public relations organisation in Geneva said that information had been given to him that 176 troops out of 600 British troops had been killed. The whole House will know that not one British soldier took part in the fighting. To be fair, he himself did not issue that statement, because, he said, it was untrue. This is a matter which is not of the highest priority at the moment, when we are all concerned with relief.
The House will be aware, following the report of the Select Committee on Members' Interests (Declaration), that I said, when establishing that Committee, that the House might wish to turn to the question of the brain washing, not only of Members of Parliament, who can, I suppose, look after themselves, but also of the communications industries, and so on, by some organisations who may have the right to do what they do but should declare that they are doing it.

Mr. Hugh Fraser: On a point of order—

Mr. Speaker: Order. We have had an important discussion but I must protect the business of the day.

Mr. Hugh Fraser: In spite of what the Prime Minister has said, I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
that the Government's Nigerian relief contingency plans referred to by the Foreign Secretary in a broadcast on Sunday, 11th January, and expanded by the Prime Minister today, do not meet the requirements of the distressed areas.
This is a matter of grave and immediate importance, but also one of public importance in that there is widespread concern in this country that Britain's part in aiding the Nigerian war effort places on us a unique responsibility


which, despite the words which the Prime Minister has spoken and the good intentions which he expressed, is not being fulfilled.

Mr. Speaker: The right hon. Member for Stafford and Stone (Mr. Hugh Fraser) was courteous enough to inform me that he would seek to make an application under Standing Order No. 9 this afternoon.
The right hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
that the Government's Nigerian relief contingency plans referred to by the Foreign Secretary in a broadcast on Sunday. 11th January, and expanded by the Prime Minister today, are inadequate, have failed to encourage the use of immediately available international relief supplies and cannot meet the immediate needs of the most affected areas adjacent to Uli airfield, which is open but unused and from which, according to Joint Church Aid, over 4 million persons were receiving, and have since 9th January ceased to receive, a minimum of sustenance.
As the House knows, under the revised Standing Order No. 9 I am directed to take account of the several factors set out in the Order, but to give no reason for my decision.
I have listened carefully to the representations made by the right hon. Gentleman and to everything that has taken place during the last important 45 minutes, but I have to rule that the right hon. Gentleman's submission does not fall within the provisions of the revised Standing Order, and, therefore, I cannot submit his application to the House.

Orders of the Day — NATIONAL SUPERANNUATION AND SOCIAL INSURANCE BILL

Order for Second Reading read.

4.23 p.m.

The Secretary of State for Social Services (Mr. Richard Crossman): I beg to move, That the Bill be now read a Second time.

Mr. Speaker: I wish to announce that I have selected the Amendment which stands in the names of the right hon. Gentleman the Leader of the Opposition and some of his hon. Friends and that I have not selected the Amendment which stands in the names of the hon. Member for Cornwall, North (Mr. Pardoe) and some of his hon. Friends.
The latter Amendment states:
That this House, believing that the role of the State so far as occupational pensions are concerned, should be to provide flat-rate benefits in return for earnings-related contributions, is opposed to the system of, earnings-related pensions as put forward by the Government and supported by the Conservative Party, and, therefore, declines to give a Second Reading to the Bill.

Mr. Crossman: Anybody faced with the job of bringing forward a major social Measure of this kind is in something of a quandary. Tradition tells me that I should concentrate on going through the Bill to expound at least the major Clauses, but if I were to do that on this Bill I would not only extend a speech which is, in any event, bound to be long, but would also fail to put to hon. Members the real issue on which we will be voting tonight. That issue is the real significance of the Measure, which will launch the biggest revolution in the sphere of national insurance since the Beveridge Report and the "James Griffiths' Act" which implemented it.
I think that it is not the detail of the Bill which matters on this occasion. That we can deal with in Committee. I must seek to give the House the justification for a Measure which will not only affect every citizen in the country, whatever his or her age, but which will also cause a great deal of disturbance and inconvenience to that large and influential body which comprises what I could call the insurance establishment;


the life officers, insurance brokers, the men who run the private enterprise pension funds and the quiet, unknown pension experts who manage the public service and nationalised industries schemes.
I always knew that they comprised a powerful group, but their influence has been brought home to me more than ever since last January. When we published our first White Paper it plopped like a lump of dough into a pool of public indifference. It was only when the pension interests had had time to estimate the significance of our plans and their potential effect on the things with which they are concerned—the occupational schemes—that the public discussion really began. I am grateful to them for making sure that this Bill will be seriously debated outside, as well as inside, Parliament.
Nevertheless, I feel that the way that this discussion started had one distorting effect. National superannuation nas been discussed in the last six months not in the human terms of its impact on the lives of ordinary people, but in the specialised lingo of pensioneering; for example, in terms of pre-award and post-award dynamism, of early maturity, of abatement and the rest.
For those with a taste for it, pensioneering is as good as a game of chess, but during the course of the long arguments which I have conducted with the pension interests I have sometimes been plagued with the fear that the people are coming to the conclusion that they should leave this problem to be argued out by the pensioneers. I hope that the House will agree that this would be a very wrong conclusion to reach. Whatever view one might take about the merits of the Bill, the changes that it makes will be tremendously important to ordinary people.
It is, therefore, vital in the coming months, when the people are estimating the rival merits of the two parties, that the merits of this Act—for it will be an Act in the coming months—should be considered to be one of the acid tests of the election—the criteria by which the parties are judged—because the Bill undoubtedly deals with the greatest social problem of our domestic politics in the second half of the 20th century. It is the problem of how to abolish poverty

in old age—that poverty which drives 2 million of our citizens to apply for supplementary benefits under a means test and which must increasingly irk the conscience as our society grows more and more affluent.
Poverty in the 'thirties was infinitely more widespread than it is now, but it was shared by whole communities. It was a mass poverty, while today we have poverty in the midst of plenty. Today, it is poverty from which the working population, even in what were once disstressed areas, is largely excluded. It is poverty concentrated on those who are the weakest and least able to protect themselves; the chronic sick, the widows and deserted wives, the unmarried mothers and, above all, the 14 per cent. of the population who are over pension age.
Over the last 20 years the standard of living for those who work in this country has risen far faster than in any previous epoch of history. When Harold Macmillan remarked, "You have never had it so good" he coined a platitude, since in this period of technological change every industrial nation has almost automatically a higher standard of living this year than in the preceding year. Modern science, modern technology and modern management have solved the problem of poverty in the sense that they have made it possible for nations equipped with these techniques to increase their national wealth year by year.
What they have not done, however, is to formulate a technique to see that that wealth is fairly shared between those who are fit and able to look after themselves and those who are too weak, too sick, or too old to fight for their fair share of it in an affluent society. I suggest that one of the tests by which the Labour Government and the former Conservative Administration should be compared is to ask what precisely each have done to assure to our old people, our sick and our widows their fair share of rising national prosperity.
Let us look at the record of our predecessors. During the 13 years of Conservative rule the scandal of the pensioners' poverty in the midst of plenty became blatantly clear, as did the cause; the system of flat-rate contributions and benefits recommended in the Beveridge Report. I suppose that in 1942, when


Beveridge wrote it, we were looking back to a decade of mass poverty, so that it was easy to jump to the conclusion that a just social insurance system should impose fair shares in poverty.
That concept of equality in misery was confirmed by the rationing and queuing which five years of total war required of us. But as soon as we moved out of the war and post-war shortages into an era of economic expansion the whole concept of flat-rate contributions and flat-rate benefits became a complete anachronism, for when people stop earning what they need is not a flat-rate level of subsistence but an income related to what they were getting when they were at work.
By the mid-1950s, when the Labour Party in opposition began to work out its plan for national superannuation, it became clear to anyone who did not wilfully blind himself to the facts that it was high time that we followed the example of nearly every one of our progressive neighbours in the Western democracies by scrapping flat-rate State insurance and moving to a system of earnings-related contributions and benefits. What made the need for change more urgent was the contrast emerging between the lucky minority of members of earnings-related occupational pension schemes and the unlucky majority of national insurance contributors who had nothing but the flat-rate scheme to rely on, through no fault of their own unless it was a crime to work in building or agriculture where there were virtually no occupational pensions.
In the preface to our first policy pamphlet, "National Superannuation", I coined the phrase, "The two nations in old age." I think that it was true then, and it is just as true today except that the proportions have changed. By now, the numbers in occupational schemes have probably just about become a majority. I think that that is an accurate measure of what was achieved for our old people during our predecessors' 13 years. Under them, the number who could look forward to something like security in old age increased, but there are still many millions who, without radical reform of social security, have no prospect of sharing in any genuine security for old age.
I know that that statement will be challenged in this debate and in the months ahead. I shall be told that our scheme is unnecessary and that, if we are prepared to wait, we shall see the occupational schemes expand and develop in such a way that all that the State need do is provide a minimum foundation on which they can rest. However, in my considered view, those who talk like that are practising a wicked deception on the public, and I will give the facts to substantiate that charge.
There are six hard facts on which I substantiate it. The first fact is that, of 1 million employers, only 56,000 have occupational schemes. A great many look after their white-collar staff, but make no provision for their manual staff. I invite right hon. and hon. Members opposite to challenge that.
The second fact is that just over half our insured workers are now members of occupational schemes, but only a minority of those schemes provide the two-thirds or half pay on retirement which is required if they are to make an earnings-related State scheme unnecessary.
The third fact is that there are a number of very important industries with large numbers of employees where there is virtually no pension provision and no prospect of it. I have mentioned the most important—agriculture and building.
The fourth fact is that only 25 per cent. of working women are members of schemes. It is no good saying that that does not matter because married women can rely upon their husbands' pensions. What happens if their husbands die?
That brings me to the fifth fact, which is the inadequacy of widows' pensions in the occupational sector. Only about a third of male members of schemes are unconditionally covered for widows' pensions. The figures are rising, but they are never likely to approach 100 per cent.
The sixth fact is that it is estimated that, by the turn of the century, there will still be a third of pensioner households receiving no occupational pension at all.
Was I unjustified in saying that those who argue that the growth of occupational schemes can be a substitute for a State scheme are practising a wicked deception on the public?
I come to the second point which has been made, and I reply to it now. It is


one which the hon. Member for Hertford (Lord Balniel) rather likes. He says that our scheme is too complicated. In his perorations, he never misses saying that it is incomprehensible. Before he says it for the nth time, I will deal with the problem of the so-called incomprehensibility of the scheme.
If it were incomprehensible, that would be a serious criticism of it. However, the fact is that national superannuation, as we have demonstrated clearly in a little booklet, price 1s., is a straightforward pensions plan which is no more difficult to understand than those run by local government, I.C.I., Esso, or the electricity boards, all of whom have produced schemes as easy as our own. Our new earnings-related scheme, with the stamp abolished, a simple percentage deduction from earnings and a single benefit formula, is far less complicated and unintelligible than the mixture of flat-rate and graded element invented by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in 1959. In our plan, we are greatly simplifying matters and removing not merely the injustices, but the intolerable complexities of a double contribution system.
Having said that, however, I will give something to the noble Lord. There are three parts of the scheme which are tough going and difficult to understand. I want to explain each of them and why we have included them. I will call them by their pensioneering names. They are pre-award dynamism, the redistributive element in the pension formula, and abatement.
Taking pre-award dynamism first, one question which N.A.L.G.O. members often put to me is why, instead of adopting a clear and simple final salary formula, with half, two-thirds, or 42 per cent. of pay on retirement, we have preferred a vastly more complicated whole-life basis. The answer reveals a vital difference between our scheme and most good occupational schemes.
These schemes, nearly all started for the white-collar workers, began historically as pensions for higher executives. Naturally, for them, it seems common sense to say that, if the aim is to give them a favourable pension, it is best averaged out over the last three years of their work which, by and large, is the

period when they earn their highest salary. That is true basically of local government and central Government employees and of most executives in industry. But what sense does that make for a steel worker, a coal miner, or any other industrial worker, whose maximum earnings come in middle age? A final salary pension formula is worth nothing to him. It bears no relation to what he has earned during his working life.
Therefore, we knew that we were not just repeating the philosophy of the private pension. We decided, in the State scheme, to have a pension designed to make sure that it is fair to the man or women whose earnings reach the climax in middle life and fall away in the last 10 years. There is no other answer to the difficulty in terms of social justice.
I know that a whole-life basis is complicated. I do not deny that it becomes even more complicated when it is combined with a system which revalues the pension entitlement each year to keep pace with rising wages. However, if we do not do that, we do not do what corresponds to the with-profits life insurance policy. It is no good having a premium which gives one a fixed sum at the end of one's life. That sum must have added to it sums which give one a share in the rising national income. Unless there is a corresponding revaluation in the State scheme, people will not get their fair share. For that reason, we have to have the complicated whole-life system, with revaluation throughout the working life.
If it is complicated, its justification is that, for the first time, we have a system which is fair to the industrial worker and gives him the earnings-related pension that he needs. Therefore, I take the first of these complicated points.
The second is the redistributive element. It is true that the normal occupational scheme assesses benefits, like contributions, on a straight percentage. The more one pays in contributions, the more one gets in benefit, and there is a strict one-to-one correlation between the two. In our scheme, the contributions are straight percentage, but the benefit is calculated on a weighted formula which provides 60 per cent. on earnings up to half average male wages—that is, £12 a week today—and 25 per cent. from this level to a ceiling of £36 today.
It is obvious that this formula is not only a little more complicated than the straight percentage, but also weighted in favour of the lower-paid worker. The result of the weighting is that a single man on £36 a week—that is, at the ceiling—will receive in return for his 6¾ per cent. a pension of 37 per cent. of his earnings, whereas the man earning £15 will get 53 per cent. of his earnings. That is the difference of the weighting in the formula.
I was amazed when a kind, bespectacled lady came from the Daily Mail to see me and, a few days later, published an article in that newspaper revealing what she called my well kept secret of Socialist redistribution and rebuking me for departing from the principle of commercial insurance. We made every effort to emphasise this non-commercial Socialist aspect of our scheme because, without it, we could not achieve our main objective of abolishing poverty in old age over the next 20 years. Indeed, this lady discovered that redistribution in this way is not the only redistribution of the scheme. It is weighted in other ways as well. It is weighted, according to her, grossly unfairly, in favour of married couples as opposed to spinsters and bachelors because the wife's allowance is added to the husband's in the pension scheme. It is also heavily weighted and biased in favour of the over-45s in order to help them—that is, early maturity during the next 20 years.
The first objective of our scheme is the provision of an adequate pension related to earnings for every contributor right to the top. The second is a social weighting and a social priority, first, to get the lower-paid worker above supplementary benefit as fast as we can, and, secondly, to help the middle-aged contributors, to ensure that the man of 45 can obtain the full benefit of the change to the new scheme in 20 years. Thirdly, it is aimed at married couples and widows. If anyone says that this makes the scheme more complicated, I reply once again that the social aims we achieve with these measures seem to justify that degree of complication.
The third complexity—and far the worst—is the system of abatement. I confess frankly that I am not going into detail because the House debated this

subject for a whole day, although, unfortunately, I was not present. I say frankly that this is extremely difficult and extremely obscure and I do not deny that the abatement scheme will be costly not only in money but in skilled manpower to the State and to private firms.
Why, then, have we built it into our scheme? It is because we believe that we can provide a high level of pensions for all only by a partnership between the occupational pensions schemes and the State sector. That is why we have been willing to complicate our scheme in this way. This is an unprecedented way in which we are doing things, and we are the first nation ever to try to do it. Abatement or partial contracting out of an earnings-related scheme have not been attempted in any other country. I challenge the Opposition to give me any example, even from Venezuela.
I believe that the terms we have offered are fair to those contracting out. Indeed my only doubt is whether they are not a bit too fair at the cost of those who remain wholly inside the scheme. This suspicion is confirmed by the curious change which has come over a number of pensions experts since the terms of abatement were announced. In the weeks when I was privately discussing those terms with the pension interests concerned there was a tremendous barrage in the Press and no language was too strong to describe the disastrous effects which would follow if I made far larger sums available out of the National Superannuation Fund in order to offer a bigger inducement to contracting out. I finally made a small concession, but basically we resisted that pressure and stood by the Government Actuary's advice. Since then, what has happened? The whole idea that our terms would be so unworkable, harsh and damaging to the pensions interests as to kill contracting out has been quietly dropped. Even the other day at a meeting of the National Association of Pensions Funds, Mr. Michael Pilch of Noble Lowndes—and one cannot have a bigger pensions pundit than Mr. Michael Pilch—made an informed guess that the number contracted out under the new scheme would be 7 million, compared with the 5½ million contracted out today. What a remarkable change of view by the pundits who were saying that we were bound to create conditions when


no one could consider the possibility of contracting out! So much for the suggestion that the Bill would damage the development of occupational schemes. No Government have taken more trouble than we have to protect the pension interests in introducing a new State scheme.

Mr. Tim Fortescue: At the beginning of his speech the right hon. Gentleman told the House how very simple this scheme was compared with other schemes. For the last 15 minutes he has been talking about its complications. Would he now explain very simply to the House exactly how a pensioner's pension will be calculated in 1992 so that we can put it to the people who come to see us?

Mr. Crossman: I put it strongly to the hon. Gentleman that we have already put this clearly in our shilling pamphlet. All the calculations are contained in it. It is only the hon. Gentleman's determination not to accept an intelligible explanation which enables him to maintain the view that the scheme is incomprehensible.
The hon. Gentleman complained that I have been taking a long time. The longest time that I have spent has been on abatement. One of the things on which the Opposition do not disagree is that there must be contracting out and that there must be abatement, so they should recognise that this is a complication in the scheme and that it is far the most cumbersome and burdensome of the complications.

Mr. Joel Barnett: Does my right hon. Friend accept the estimate made by Pundit Pilcher, as he described him, of the number who will opt out? If so, what effect will that have?

Mr. Crossman: I described it as a guess. It is no secret that we based our scheme on the view that we would not have been fair if we had not introduced a scheme in which we could get at least as many individuals contracting out as at present, but we expect more to contract out. We would not be disturbed by that number. It is within the bounds of possibility.
I want not to go through the parts of the Bill but to deal with a few of

the controversial Clauses in each part and I begin with "contributions" under Part I. The House will notice that the figures in the Bill are a slight departure from those in the White Paper where the contributions were 6¾ per cent. a side. Clause 2 provides that the employers will pay 7 per cent. That difference does not mean that we have abandoned the principle that employers and employees should contribute broadly equally to national insurance. What I have done is to increase sharply the employer's share to the so-called National Health Service contribution.
At present we are facing the oddity that a total contribution of 3s. 10d. flat rate is divided into 8d. from the employers and 3s. 2d. from the employees. I have always found this weighting an indefensible anomaly and I have taken the chance to put it right, since in my view there is every reason why British industry should pay a larger share of what is, after all, a Health Service levy, not a National Insurance contribution. I shall also be introducing in due course a short Bill designed to increase the employers' share of the present flat-rate levy between now and 1972 when the new contributions are due to begin.
I turn to what I regard as the Opposition's central objection. The Opposition simply say that the contributions will be too heavy. The burden of their complaint is found in one part of their reasoned Amendment in which they ask the House to reject the Bill on the ground that it
vastly increases the burdens of taxation and contributions on individual men and women".
Before the Opposition commit themselves irrevocably to that proposal, I had better warn them that the facts are against them, and that the longer we debate—

Lord Balniel: rose—

Mr. Crossman: I am in the middle of a sentence.

Lord Balniel: That is the point.

Mr. Crossman: —and the longer we debate pensions in the country the less convincing this charge will seem.

Lord Balniel: My objection to the right hon. Gentleman's statement was that he interrupted a sentence in the reasoned Amendment. The sentence ended with


the words "without helping existing pensioners".

Mr. Crossman: I shall deal with existing pensioners separately.
There are two charges. One is that the contributions will be too heavy and the other is that existing pensioners will not be helped. I shall deal with both charges; knowing very well that the noble Lord will make both charges throughout his speech I may as well deal with both before they are put.
Let us remember that under our scheme almost everybody from the top of the scale to the bottom will be receiving greatly improved benefits. To pay for these benefits about 8 million people will be contributing less than they contribute now.
I take as an example the £20 a week man—just a little below average industrial earnings. His present contribution, if he is not contracted out, is 27s. 10d. a week, which represents 6·95 per cent. of his earnings. A change to a 6·75 per cent. contribution will mean that he has a reduced contribution. If he is contracted out, the same will apply. At present, he pays 5·65 per cent. of his earnings. Under our scheme this will go down to 5·45 per cent., or from 22s. 7d. to 21s. 10d. I have not seen in the Press criticism of the scheme very much account of how the £20 a week man will pay less for substantially improved benefits.
I know that I shall be told that the real hardship comes higher up. It can come only between £20 and £30 a week and so I take the example of a man on £25 a week. He is now paying 31s. 1d., or 6·2 per cent. of his earnings. An increase to 6¾ per cent. does not seem unduly harsh. I will leave it to the noble Lord to read out the actual amount in pounds, shillings and pence to show what the actual increases are for men earning between £25 and £30 a week.
The truth is that with the one more up-rating in our present system of contributions, which will almost certainly have to be made before this scheme comes into force, there will be even greater reductions in the present contributions with the coming into operation of an earnings-related scheme.
I have said that because it was important to get rid of one of the Opposition's criticisms, which was that the scheme would require enormous increases in the payment of contributions as compared with those being paid now, or likely to be paid in two years from now, just before the scheme starts.

Mr. Kenneth Baker: Did the right hon. Gentleman say that, irrespective of which party is in power, there will have to be an increase in the present proportion of contributions, irrespective of whether a man is contracted in, as there was this year, to bring the level to the 1972 level?

Mr. Crossman: The hon. Gentleman should not draw that assumption. I said that there would have to be a general increase of contributions, and that means either increasing the flat rate, in which case the outrage becomes greater, or increasing the graduated element. It is not for me to say what will be done two years from now, but after that addition there will be very little margin for the claim that the new scheme will impose heavier contributions than the amalgamation of flat-rate and graduated elements invented by the Opposition—if the level of the pension is to be maintained.
I will not deal at length with the short-term benefits, benefits for sickness and unemployment, because there is nothing which I want to add to what has been said in the White Paper on that subject. However, I should like to refer to Clause 17, which is the only new provision and which provides for a constant attendance allowance. I should like to say this personally. There has been a growing demand, of which that remarkable organisation the Disablement Income Group has been the spearhead, for special provision over and above what is already given for anyone seriously handicapped on disablement. We have all been deeply moved by the lives as well as the words of people like Anne Armstrong and Megan du Boisson. Without them it may well be that Clause 17 would never have found its place in the Bill. The Government can claim credit for listening to people who knew all too well what they were talking about.
We expect about 50,000 people, including housewives and children, to qualify


for the new allowance at the outset, for it will be paid irrespective of age. We shall be getting together at an early date the best doctors we can find—because this allowance must be administered like a war pension or industrial injuries pension—to make assessments by forming an attendance allowance board which will guide us on the many medical issues and deciding the medical aspects of claims.
I intended to deal with the women's charter, but I do not think that there is likely to be great disagreement in this debate on that subject. Indeed, I get the impression that the Opposition do not have much to criticise on the subject of women's pensions. As I should like to save time, I will leave that subject and not take credit for what is a remarkable women's charter. It is very powerful, and I gather that it is unlikely to be attacked today.
I come to Part VII of the Bill and to Clause 109—the preservation of pension rights. This is one of the most difficult, one of the most controversial, and one of the most unsatisfactory problems with which we have been dealing. I need hardly say that this Clause deals entirely with private occupational pension schemes. The State pension is absolutely and completely transferable, however often one changes a job, but this is not the case with the 65,000 private occupational pension schemes.
What sheer hypocrisy it is to talk about pensions as deferred pay when, in fact, today 60 per cent. of the members of the occupational schemes have no rights to their accrued benefits on change of employment and fewer than one in ten on leaving one employment actually get the accrued pension rights preserved for them! What a scandal it is that our predecessors did nothing whatever to deal with this problem!
The Opposition say that the private schemes are the alternative to an adequate State scheme, but the only possible way in which to make them an alternative is to make them by law fully and absolutely transferable, not just preserved. But the difficulty, as we know from the Ministry of Labour N.J.A.C. report, is that that is impossible because of the nature of the schemes. In a jungle of private schemes, good, bad and indifferent, with every type of quality and every type of condition,

full transferability cannot be legally enforced from firm to firm or from scheme to scheme. There is a total mix-up of schemes. Full transferability could be enforced only if all the schemes were rationalised and some rhyme and reason and order were brought into the arrangements, so that at least they were put into classes or groups.
The best that can be achieved by legislation is the preservation of rights, and it is very much a second-best. As a man moves from employer to employer, he freezes each little bit of pension and at the end of his working life he collects perhaps ten or eleven different bits of pension. Once again, one is forced into the most appalling complexity and one is forced into it because of the inability of the private sector to organise itself and the failure of the Tory Government to do anything about this problem over 12 years.
If full transferability is out of the question, we have to have the second-best. I thought that we could legislate for full preservation not only for the future, but with some retrospection for existing pension rights. From our first White Paper it will be assumed that that is what we will do. That is what I had hoped. But our hopes have been dashed. The people who laud the occupational schemes and say there is no alternative will not dream—[An HON. MEMBER: "The unions."] The unions are in favour. I am talking about the employers. The employers are appealing against what they call retrospective legislation. They say that it would mean retrospective legislation and cancellation of contracts. Full preservation can only be done with consensus. Therefore, they have the power to veto this and say, "Because it imposes a cost on us we will not dream of having anything of this sort in retrospect."
I asked whether we could have phasing. No, we cannot have phasing. These self-same people who are pressing the occupational world as being the real alternative, when asked even to legislate retrospectively to make it, at any rate, possible to get full preservation, will not do it.
I am delighted to find that at least we are supported in this by some hon. Members opposite. I welcome the early-day Motion on this subject. It is not up to


me to comment on the measure that the Motion urges my right hon. Friend the Chancellor to adopt for this purpose. In my view, an Amendment to Clause 109 would be the right way to achieve it. If those hon. Members opposite who have more influence with the employers and the C.B.I. than I will use their time between now and Committee to persuade them to see the light, to share the shame and humiliation which many progressive employers feel at the behaviour of the C.B.I., I urge them to do so. They will have a Minister in Committee willing to receive with open arms any Amendment made possible for me. There is an offer.
I want now to deal briefly with the charge that our new scheme will damage the savings generated by occupational schemes. It is true that every time we improve a compulsory Government scheme we disturb the occupational schemes which are sitting on top of it, and the bigger the jump from the old Government scheme to the new one the bigger the disturbance. I do not deny that the jump from the miserable Boyd-Carpenter pension to our new earnings-related pension will make it necessary for many occupational schemes to adapt themselves, despite contracting out, if only because our Government scheme with a good occupational scheme on top of it will in some cases produce over-pensioning up to 120 or even 130 per cent. and consequently excess contributions which nobody wants. It is obvious that it will have to be done. Even with contracting out, there may well have to be a cut-back in some schemes to make room for the Government scheme. That is why there is bound to be some slowing up in the first year or two in the growth of pensions funds after national superannuation is introduced. But if hon. Gentlemen opposite believe that this will have a permanent and serious effect on savings, I take issue with them.
In many countries—I am thinking particularly of Sweden, which I recently visited—there have been examples where big new Government earnings-related schemes have been introduced and always, after a temporary slowing up of growth, the expansion of the occupational sector is resumed. It happened in every

other country, and it will almost certainly happen here.
Some of our critics talk about savings through occupational schemes as though they were the only form of savings available. We must remember that they constitute only 10 per cent. of total savings. The impact on total savings of the introduction of our scheme will be very small indeed, particularly when we remember that the income of the National Superannuation Fund will exceed expenditure for at least four or five years. This increase in public savings will more than compensate for the temporary reduction in new savings through occupational pension schemes.
It is important to remember one other matter. If, despite all our efforts, the impact of our new scheme on occupational schemes is greater than we would like, the fault for this falls fairly and squarely on the shoulders of the Opposition. By keeping the flat-rate system long after it was completely obsolete and adding to it a miserable graded element they delayed the change-over to complete earnings-relation for a whole decade in the course of which the vacuum was filled by a mushroom growth of occupational schemes which now have to adapt themselves to a modern State scheme. The truth is that the Bill should have been put on the Statute Book at least ten years ago. If that had happened, the disturbance to the insurance establishment would have been correspondingly less.
I come to the concluding words of the Opposition's Amendment—the charge that the Bill does not help existing pensioners. I find this a trifle disingenuous, because the Opposition know, as well as I do, that the earnings-related pensions, which we shall be introducing over 20 years, must be earned by earnings-related oontributions and cannot affect existing pensioners. What they need is not pie in the sky, a promise of a new kind of pension years ahead, but a higher standard of living now in terms of bettering the existing flat-rate pensions. This is precisely what they have got from us since 1964. We have raised the pension three times in five years by a total of 32s. 6d. compared with 37s. 6d. in 13 years of Tory rule. If anybody wants that in terms of real value, as I do, the


pension today stands 20 per cent. higher than when the Tories left office.
I should like to say a word not only about old-age pensioners, but about widows. I am glad that the Opposition like the improvements that we promise in future. But the widows, like the pensioners, are concerned not about the future but about what happens now. We have been active for the widows in the last five years. They judge the two parties by the help that they have actually received. They are receiving 20 per cent. more in real terms than when the Tories left office. They have also seen great improvements in the allowances for dependent children, the abolition of the earnings rule, the introduction of the earnings-related supplement to the widow's allowance and the doubling of the period of payment. As soon as we took over we gave concrete help to the widows and pensioners first. Only then did we turn our attention to the Bill and to the long-term job of ensuring that the misery and injustice of the last 20 years should not be repeated upon the next generation in the next 20 years. That is why the Bill got delayed.
The Bill deals not only with future pensioners. It includes one vital benefit for existing pensioners. It provides them with the firm guarantee built into legislation, which they demanded for 13 years from the Tory Government, that the pension should, once and for all, be made inflation proof. When the Bill becomes law it will at last be a statutory obligation to review the level of pensions every two years and to make such increases as will as a minimum compensate for rises in prices in that period.
Ever since I got mixed up with pensions 15 years ago, pensioners have been demanding this statutory up-rating, which should remove the political jockeying and manœuvring which under the system that the Tories perpetuated precedes every election. Under the Bill the automatic up-rating will not be conceded as an act of grace or political calculation; it will be there as a statutory right. I am proud that it is this Labour Government which will put this long overdue reform on the Statute Book.
I can understand why the Liberal Party is opposing the Bill, because it has made clear that it believes in earnings-

related contributions and flat-rate benefits. That system operates in New Zealand. It is a tenable view, about which I can argue and explain why I reject it. But there is no such clarity on the Tory side. When we prod and push what do we get? We have great hopes of the speech which will follow mine. I read in the papers that the Leader of the Opposition will insist on a clear constructive Tory alternative to our scheme. I wish the right hon. Gentleman well, but he is not here this afternoon.
We have some agreement. The Opposition think that we must switch from flat-rate to earnings-related contributions to finance any pension scheme. Agreed? Yes. Second, we all agree that we believe in not flat-rate benefits but a system of earnings-related contributions and earnings-related benefits. That is what I am told, in my absence, the noble Lord revealed to the House in the last debate. Third, he said that he believes in all the complexities of contracting out, except that he wants to dole out a lot more out of our funds for the boys. If that is what hon. Members opposite agree with, it is baffling why they are going into the Lobby.
I think that there are two motives which impel hon. Members opposite into the Lobby. First, they believe that there are votes to be gained by systematically exploiting the anxieties felt by many members of occupational schemes, particularly in the public sector, about the effect on their pensions when our new scheme comes into force. These anxieties are inevitable and legitimate, but in some cases they are combined with a less reputable motive—a sense of grievance at the prospect that their own special kind of pension will soon be available to every national insurance contributor in the country by paying his national insurance contribution. Privileges never seem quite so valuable when they are available to the common herd. Naturally, because they are the party of privilege, the Tories have spotted this, and they are determined to work up a pensions panic, a combination of legitimate anxiety and dog-in-the-mangerdom which will make people respond to the slogan—I give it to them free, gratis, and for nothing— "Your occupational pension is in danger. Vote Tory to preserve it". That is what they are out for.
There are two reasons why this campaign will fail long before we come to the election. First, it is untrue that there is any real danger of occupational pensioners being worse off, taking State and occupational pension schemes together, after the new scheme begins than they are today. On the contrary, employers should be able to dovetail the two pensions so as to draw substantial advantages from combining the two, and this is what pension experts are saying in the Financial Times. The panic which N.A.L.G.O. tried to build up is dying down because its members can see that the wild statements made by some of its leaders are untrue. In the coming months we shall be able to announce more facts which will make nonsense of the pensions scare, and that is why I am not afraid of it.
There is a second reason why the Tory campaign will boomerang. In the last 100 years every one of our progressive ideas of social service has been launched by philanthropic or far-sighted employers determined to look after their workers. Among private employers, co-operatives, local authorities and Government Departments one can find endless examples of pioneering initiatives, in social welfare and security, in safety in factories and mines, in sickness schemes, in canteen feeding, in savings clubs, and in retirement pensions.
The story always repeats itself. The pioneering employer starts privately on a small scale. The movement spreads, and after a time society is faced with a glaring contrast between the advantages enjoyed by the lucky workers employed by people who have decided to act in advance and others in miserable conditions outside. There is then a hiatus while a Conservative Government are in power. Then there comes a radical Government who, after years of Conservative delay, are prepared to deal with this problem, not to level down but to level up, not to penalise the good employer but to compel reactionary employers to come into line and so transform the private security which has been a privilege reserved for special groups into the social right of every citizen.
I find it hard to believe that many people, either in the public service or in private industry, who are members of good private schemes will be persuaded

by the Opposition to oppose the extension of comprehensive State earnings-related benefits for employment and sickness where they are working to retirement pensions as well. If it is good for sickness and unemployment to be dealt with by way of earnings-related benefits, it must be good for the pensioner as well.
The second reason why the Tories want to find a reason for opposing this Measure is that they calculate that the increased contributions will anyway be unpopular, and they will be able to exploit them in their general effort to present themselves as the champion of the taxpayer. I think that many Tory spokesmen have said that our scheme is bad, that it is too expensive, that it is too lavish, that it is a luxury which the country cannot afford. It is, in fact, a modest foundation. It is not all that lavish. Figures of 37 per cent., 40 per cent. and 53 per cent. of earnings are not staggering. It is a start, but it is interesting to note that Conservatives who find nothing wrong with a two-thirds private scheme are shocked when we introduce even a modest State scheme.
This is an issue on which the country will have to decide. In the 'fifties we entered the affluent society. By the end of the 'seventies we shall be a nation of car-owners, colour television owners, the takers of annual holidays overseas, not to mention the pleasures of the racecourse and the bingo hall. We shall be able to afford all these things if our opponents have their way. The one thing which they say we cannot afford is a scheme of earnings-related State pensions which will remove the scandal of two million fellow citizens, half of them widows, in such grinding poverty that they require a means-tested supplementation to eke out their inadequate incomes; and we have roars of laughter from the Tories even at that suggestion.
I cannot decide which was more scandalous, the determination of the Tory Governments of the 'thirties to tolerate mass poverty on the ground that it was endemic to the economic system or the determination of our contemporary Tories to encourage private pensioneering but to prevent any radical reconstruction of the State pension which alone can deal with the problem of poverty in old age.
I appreciate that the reasoned Amendment is carefully drafted. It does not commit the Opposition to outright opposition to the principle of an earnings-related pension. What it suggests is that a Conservative Government will achieve the same objective, but it will be cheaper. If that is their idea, I hope that they will spell out how they will get contributions down and benefits up. My view is that all that they are doing on this Measure is reconstructing the mistake which they made in 1948 when the National Health Service Bill came before the House. At that time, which was long before the National Health Service was demonstrated to be a great success—indeed it was then an untried and revolutionary idea—it was condemned by many people as a lavish hand-out, inordinately complicated and most complex. All kinds of adjectives were used about that Bill. General practitioners in the B.M.A. were against it, and many so-called health experts predicted that it would fail. So the Conservatives decided to have it both ways. They said that they wanted to show themselves in favour of the idea of a free health service, but they questioned the practicality of the Aneurin Bevan plan. They calculated that that would enable them to wait and see whether it worked, and if it did, to claim that they were in favour of it, and if it did not, to claim the credit for predicting the failure of a piece of Socialism.
History is repeating itself, and I am so relieved that the Tories are going into the "No" Lobby tonight. I gather that they will vote once for certain. Why not vote twice? Why vote only for the Amendment? Why not vote against the principle of the Bill to demonstrate their view? Whatever they do, we on this side of the House will make sure that their position tonight in the Lobby will be remembered against them when the challenge of poverty in old age has been overcome by this Measure and the years which preceded this Measure are viewed as a shabby passage in our national history.

5.19 p.m.

Lord Balniel: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
this House, while recognising the rôle of the State in providing a firm guarantee of security

in old age and welcoming improved provision for widows and the most seriously disabled, declines to give a Second Reading to a Bill which will damage the development of public service and occupational pension schemes and the savings they generate, and which vastly increases the burdens of taxation and contributions on individual men and women and industry without helping existing pensioners.
I do not think that any Minister has had a greater personal opportunity of undertaking a major constructive reconstruction of social insurance than the Secretary of State for Social Services himself. All political parties are agreed that the time is now right for another step forward, that the present system of financing is inadequate and that an earnings-related contribution is more appropriate. All are agreed, surely, that there are certain grievous needs in society which have got to be met.
Amongst the general public, I believe, there is strong feeling and, indeed, a growing concern about the care which is provided for the elderly in our society and for the unfortunate. I sense equally amongst the younger generation—amongst the generation of working age—an absolute determination to provide better care for the elderly and that they themselves must be given a better chance, through reduced taxation and encouragement through a redesigned system, to provide for themselves out of their own efforts and savings something over and above what the State can provide.
In these circumstances, it seems to me almost sheer tragedy that the Bill, with certain worth-while exceptions, so blindly and, in my opinion, so stupidly fails to place emphasis where the need is greatest. Indeed, the Bill astonishingly creates a situation where the position of the existing elderly in the State scheme is going to be steadily worsened relative to everybody else in society. There is a built-in discrimination against the elderly of today in favour of the young men and women in this country.

Mr. William Hamilton: Do not believe it.

Lord Balniel: The Labour Party, I believe, now to its embarrassment, has been presented with a scheme which was worked out by the Secretary of State for Social Services and his small group of professors—they used to be known as the "skiffle group"—15 or 20 years ago.
Out of all the complexity of this Bill one stark fact stands out. It does absolutely nothing for the existing elderly. The emphasis of improvement—if one can call it improvement—the emphasis of change, is not for the elderly but is for my generation. The existing elderly are left on a flat-rate system, but my generation are promised something new. It is no more than a long-range large-scale promissory note issued by a Government who have broken virtually every single short-term promise on which they were elected.
The promise which the Government are making, in simple terms, is surely this, "I promise that our children will make for us a bigger sacrifice out of their taxation and their contributions than we are prepared to make for the existing elderly." So says the Secretary of State.
The philosophy which lies behind our approach to this matter is very different. The philosophy behind our approach is different from the Bill. It is that a prime task of the State is to provide a basic security in old age as substantial as the nation can afford, and that additional care can best, but not exclusively, be provided by occupational schemes. Where the State does have a rôle for an earnings-related element—for those people who cannot be covered by occupational schemes—it should be limited in scale and one should be able fully to contract out of it into a private occupational scheme—not just a partial contracting-out which leaves one locked into an earnings-related State scheme.
We do not believe that young and middle-aged people should be forced into a State-earnings-related scheme. Everybody should have the opportunity of an earnings-related scheme, but they should be free to choose whether it will be a State earnings-related scheme or a private occupational scheme or a public service pension.

Mr. Crossman: Is the noble Lord referring to the notion of individual contracting out, or is he saying, "We would still keep contracting out for the firm of the employer"? If he is referring to the individual, I can tell him that this was looked at for many years and it was turned down by his own Government.

Lord Balniel: I have a little cross marked against those remarks in my notes, which means "Crossman will get agitated. Ask him to wait." I am referring to contracting out of approved occupational schemes. I shall elaborate on this later in my remarks. It is a question of occupational schemes.
We have sketched our criticism of the Bill in the reasoned Amendment, but I should like to expand on the arguments against the Bill. Although this is rather an inelegant way of doing it, I find that the easiest way of doing it is in the form of a catalogue.

Mr. Peter Archer: rose—

Lord Balniel: I do not want to give way now. We have rather a truncated debate and I should like to get on.
I believe that a State scheme should be simple and clear. These proposals are complex to the point of being totally incomprehensible. To add to the complexity, the Bill uses currency figures which are not yet the currency of the realm. We are no longer using £ s. d. Hon Members are self-employed persons, and the self-employed person's contribution is laid down in Clause 3(1). It is £1·54 a week. Hon Members all know now exactly what their weekly contribution is. My hon. Friends have already worked it out. It is £1 10s. 10d. This use of decimal coinage which is not yet coinage of the realm is, however, no more than an irritating triviality when compared with the more serious features of complexity.
The National Association of Pension Funds last week reiterated its opposition to the principles on which this Bill is based, and goes on to state:
We must preface any detailed commentary with one emphatic protest at the complexity of the Government proposals. This is bound to have considerable impact on occupational schemes, if only because employers, pension fund managers and all advisers concerned with occupational schemes are going to find themselves saddled with the enormous task of trying to explain the new State scheme to employees and justifying (if they can) the intricate calculations which will be necessary to arrive at even a rough estimate of the benefit which employees may expect to receive from National Insurance.
This is why I am constantly reiterating my objection to the complexity of the scheme. It is not just that it is difficult


for us as individuals to understand the scheme. It is that no one can possibly calculate the benefits which he will receive.
At least five variables are involved. First of all, there are life average earnings which stretch over a whole working lifetime. Another variable is national average earnings. Then there is the revaluation of life average earnings to take account of national average earnings. Another variable is the special credits made for periods of sickness and unemployment which, if I understand the Bill aright, are not yet written into the Bill. A third variable is the revaluation for prices.
Not only is it impossible for any individual to work out what his benefits will be. When people actually receive their benefits—and each individual in each house in each street will be receiving a different benefit—it will be quite impossible for them to check whether they are receiving the correct benefits or not except by arguing with a computer about records stretching back 20, 25, or 30 years. This to me is a very real objection.
My second objection is that the Bill has this built-in discrimination against existing pensioners in favour of a younger age group. The Bill will treat future pensioners more generously than those who have already retired. For the elderly of today, there is absolutely nothing in the Bill except the two-yearly review, which, incidentally, is substantially less than successive Governments have achieved. Existing pensioners will be kept on the flat rate. By putting the younger generation on earnings-related benefits, a gap will be created between the older pensioner and the younger which will grow steadily bigger year by year.
Apart from the morality of this, it would be politically impossible for any Government—a Conservative Government, a Liberal Government, or, in the unlikely event of our ever seeing one again, a Labour Government—to hold a position in which the oldest were less generously treated. The 8 million retired pensioners of today will certainly regard this as totally unfair. Indeed, not only would no Government be able to hold this position: no Government should want to, because it is totally unjust.

Mr. Crossman: I am a little baffled. As I understand, the noble Lord is objecting to the fact that the flat-rate element cannot be modified. But there is nothing in the Bill to prevent any future Government increasing the flat-rate element by any amount they think right.

Lord Balniel: Never for one moment have I said that the flat-rate element cannot be modified. Of course it can be increased. What I am objecting to is the gap which will automatically be created, whereby the older pensioner will automatically be treated worse than the younger pensioner.
Thirdly, the Bill departs from the principle of concentrating help where the need is greatest. Indeed, it stands this principle upside down. Out of taxation, it provides bigger benefits for the higher income groups. This is a new and interesting and rather surprising form of Socialism. I suppose that it could be called the "Winchester model", but I do not think that Webb or Tawney would have regarded this as acceptable.
Also, while it may be logical to tie a flat-rate system to the cost of living, it is not logical to tie an entire State earnings-related system to the cost of living. If the cost of butter, for instance, goes up 6d., the cost of buying it is the same to a poor man as to a rich man. Under the Bill, they will both receive the same proportionate increase. Therefore, the poorest pensioner will receive the smallest increase and the better-off pensioner the largest increase. This does not seem to me to be a logical element on which to base an entire State system.
The fourth weakness of the Bill is that it will damage the future growth of savings. Some occupational pension schemes will be cut back. An intelligent guess by the pension experts is that about 15,000 different occupational schemes will be closed completely because of the Bill. The Minister himself accepts, to quote his words, that there will be a "slowing down of savings"—

Mr. Crossman: The growth of savings.

Lord Balniel: I apologise if I have quoted the right hon. Gentleman incorrectly—"a slowing down in the growth of savings".
But he has given no indication of how rapid the slow down in the growth will be. I am bound to point out that pension experts consider that there will be not only a reduction in the growth of savings but
…a reduction in the present amount of resources channelled through occupational schemes, rather than a mere check to growth as predicted by Government spokesmen.
Yet these savings are crucially important, not only to the economy but to the future generation of pensioners. They are infinitely more valuable than all the paper promises contained in the Bill.
The more that savings are cut back, the more future generations of pensioners will have to rely on the working population of the day to pay the bill, either through increased taxation or through increased contributions. These occupational pension schemes form two-fifths of all the personal savings in the country, and I believe that any threat to their growth, as is posed by the Bill, is bound to have very serious economic implications.
Fifth, not only will the future growth of savings of occupational schemes and public service pensions be harmed, but the interests of their members will be damaged. About 12 million employed people are in these schemes, which the Bill will inevitably damage. The Government and the Secretary of State have argued that any reduction in the scope of these schemes will be made good for younger people by corresponding increases in the State scheme.
This argument simply does not stand up. Occupational schemes often provide for retirement at 60 or even earlier, whereas the State pensionable age is 65. Also, occupational schemes often provide a lump sum, which is not provided under the State scheme. Again, there is no earnings rule in the occupational schemes, but there is under the State scheme. Yet again, contributions to occupational and public service schemes rank for tax relief, but contributions to the State scheme do not.
Sixth, the Bill builds up enormous commitments for the future. Just meeting today's commitments has the scheme floundering in the red. There will be a deficit next year alone, for instance, of

£25 million. This in spite of last month's increase in contributions—the biggest increase ever recorded in history, which was no more than was required merely to top up the pension and to keep its purchasing power the same.
It seems an extraordinarily improvident approach to solve today's problems by building up bigger commitments for the future. Of course, promises are cheap, but it is very unwise to build up commitments in 15, 20, or 25 years, for a time when there will be many more elderly people in our society but the working population who will have to pay for them will be a smaller section of society.
The seventh point is the position of married women. Married women today have the option whether or not to pay the full insurance contribution. Nearly 3 million married women and widows in employment exercise their choice and decide not to pay the full contribution. The Bill will compel them to pay it. This is a highly questionable move, at least before equal pay for women is introduced. At the moment, they pay only 8d. a week towards the industrial injuries scheme. Under the new proposals, a married woman £450 a year or £8 13s. a week—not a high salary—will have to pay not 8d., but 11s. 7d. a week. Higher incomes will result in substantially higher contributions for married women and widows in employment. For instance, a woman earning £1,900 a year, £36 11s. a week, will pay not 8d. a week, but £2 9s. 5d.
I recognise that there are special problems in connection with divorced and separated women, problems largely caused by husbands dodging their responsibilities and failing to pay the maintenance ordered by the courts. My inclination would be to try to devise better methods of enforcement, probably through the P.A.Y.E. system, rather than to pursue the questionable policy of removing the woman's right to opt out of contributions. This will impose a very heavy burden on married women, and we shall look at this very closely in Committee.
My eighth point is that it will increase industrial costs. The decision to make married women in employment pay the full contribution will, of course, be followed by wage demands. The general


increase in contributions will also, of course, be followed by wage demands.
The scheme, however, has another new feature. The earnings-related State scheme balloons outwards so as to bring in employees earning not only £18 a week, as under Conservative legislation, but earnings up to one and a half times the national average—up to £36 per week. In addition, there is no earnings limit on what employers will have to pay. They will have to pay the full 7 per cent. of their total payroll and this, taken in conjunction with the present levels of taxation, will impose a very heavy burden on industry. It will hit hardest the industries which pay the highest salaries, those in the advanced technologies, the industries which are playing a major part in the export trade. The figure of 7 per cent. is a new one. All the White Papers have a lower figure. The new figure of 7 per cent. was announced to the House only a day or two before we rose for the Christmas Recess.
My last point in this catalogue is partly one of objection and partly one of commendation. It is scandalous that no pension is being provided as of right to the over-80s. It is disappointing that no attempt is made to eliminate the anomalies whereby those who are injured or crippled by accident at home or outside receive less generous help than those injured at work. If we can afford to build up these big commitments of earnings-related pensions I should have given a higher priority to those groups, whose needs are very real.
But I warmly welcome the improved arrangements for younger widows, the improved benefits for the long-term sick or disabled, and the attendance allowance for the most seriously disabled. These are good things to achieve, and I give the Minister full credit for having incorporated them in the Bill.
Finally, I turn from the Bill's weaknesses to look at the alternative structure we should establish in the future. The Government are dreaming about a towering State edifice of great commitments for the future, with no financial foundations except that they should be paid for by our children. In a year or two their scheme will have tumbled down. It will look like Ronan Point.
The principle which activates the Bill is to extend the rôle of the State of the

expense of personal choice and at the expense of public service and private occupational pension schemes. We will not follow the Government in this new and unsound pensions structure. We will implement the proposals for widows, for the long-term sick and disabled, and the attendance allowance for the most seriously disabled. Those are good proposals, and we should try to bring them in before 1972.
Instead of what is proposed, we will encourage the growth and quality of public service and occupational schemes, so that as each year passes more and more young people can rely on those schemes to provide pension security over and above that provided by the State, a pension security based on real savings earned by investment, a pension security which gives better value for money. We shall not cut them back or kill them, as the Government propose.

Mr. Kenneth Marks: Will the hon. Gentleman give way, on the point of personal choice?

Lord Balniel: No. I am sorry.
The basic State pension will be flat rate and at least protected against price rises. There will be the possibility of a varying rate, a higher rate, for the more elderly retirement pensioners, amongst whom there is the greatest concentration of hardship. We will provide a pension for the over-80s.
Everyone should have a chance to earn a pension related to earnings. The State will run a reserve, fall-back earnings-related scheme for those employees whose employers are not prepared or able to meet the minimum requirements of a contracted-out occupational scheme.
The intention, however, is to give the maximum encouragement to occupational schemes. The State earnings-related element will in essence be a reserve scheme designed to fill in the gaps in occupational pension provisions. With suitable tax changes and simplification there is scope for an immense upsurge of savings. Approved occupational schemes and public service pension schemes will be exempt from the State earnings-related scheme. There will be full contracting out.

Mr. Crossman: It will be full contracting out of the flat-rate element, too?

Lord Balniel: Full contracting out of the graduated element, of course.
One of the difficulties of contracting out now creating much complexity lies in the present need of direct comparability with the State graduated scheme. We are working on a scheme which will avoid that need, where approval of an occupational scheme will stand on its own feet.
The rules and regulations governing occupational schemes which are contracted out will be brought up to date so as to encourage the best practices, such as insurance cover for widows and the preservation or protection of pension rights on change of job. We want every job to carry with it a good pension scheme. We think it right that people can regard this as their own and take it with them when they change their job.
This is a very different approach from the Government's. We will concentrate our efforts on helping the most vulnerable in our midst. The Bill fails to do that. We will encourage the young and the able to provide for their own future over and above the basic guarantee of security which the State can provide. The Bill fails to do that. We will encourage the growth of public service and occupational pension schemes. The Bill smothers their growth. We will expand personal freedom of choice. The Bill will diminish it.
We believe that a scheme of national insurance should be clear and based on integrity. The Bill is incomprehensible to the general public and when examined carefully is exposed as a skilful fraud.
It is for those reasons that I have moved our Amendment.

5.50 p.m.

Mr. Douglas Houghton: The first thing I want to do is to welcome my right hon. Friend the Secretary of State for Social Services back to the House in full health and form. The second thing I want to do is to congratulate him on the content, the skill, the imagination and the compassion of the proposals in the Bill. I think that, on this side of the House at any rate, we are indebted to his colleagues and his officials who have put so much into this historic Bill. If I may say so, with great respect to the Fulton Report on the Civil Service, the Bill shows what the gifted amateur can do.
Moreover, these proposals make the Beveridge scheme look like the primer on social security that it was. In its day, the Beveridge scheme captivated the imagination of the whole nation at war. It put fresh heart into the struggle against the Nazis. Many millions of people felt that Beveridge was really what they were fighting for. This scheme comes at a time of relative peace, at a time of more sophisticated expectations, at a time of a sounder promise of economic strength. My right hon. Friend said that the scheme should have been introduced 10 years ago. I wish that it had been introduced three years ago. We are in the sixth year of the Labour Government, and the scheme could have been introduced three years ago.
My main reservation on the proposals has to do with finance, because I believe that there is an element of promising ourselves pensions for the future on the basis of the next generation paying more. But, listening to the hon. Member for Hertford (Lord Balniel), it seemed to me that the Opposition's reasoned rejection of the Bill was based perhaps on the weakest ground that he himself chose. Apart from all else, I thought that his speech was not really an alternative scheme but a pensions manifesto. I think that it would be idle to pursue many of the hares he set chasing around the House which, presumably, will eventually come out in a scheme which will have the authority of the Conservative Party behind it.
My right hon. Friend dealt with two points in the Opposition Amendment. To say that the Bill will not help existing pensioners is nonsense. This is where the help for existing pensioners will come from. There is nowhere else for it to come from except the contributions of those now contributing. There is no fund for improvements to come from for existing pensioners. We have a "pay-as-you-go" scheme now and the improvements that are being given and which will still be given will surely come from current contributions. The question is what sort of contributions and their incidence upon current contributors.
The hon. Member for Hertford said that the existing elderly are left on the existing basis. I remind him—and he has the figures in a document issued by the Life Offices' Association—that over


the last 17 years the average increase per year of the flat-rate pension has been 7 per cent.; the average gross increase in earnings has been 5½ per cent.; the average increase in the cost of living has been 3¼ per cent. Therefore, existing pensioners, over the last 17 years, have done better than if their pensions had been related either to the cost of living or to the rise in earnings. To suggest that they are being left behind in the consideration of the future is unjust to what has been done by both Governments.
Existing pensioners, as my right hon. Friend pointed out, can have their pensions adjusted to any figure and on any basis that any future Government may decide. They have no contractual right which either ties them down or proscribes higher expectations. They are promised a fair deal by reference to the rise in prices and the Government are able to go beyond that at any time they feel that it is right to do so. Does the hon. Gentleman suggest that the existing pensioners can be given an earnings-related pension at this stage? If one is switching from a flat-rate scheme to an earnings-related scheme, it is obviously impracticable to go back over the past earnings of people who have already retired and begin to recalculate earnings-related pensions for them. Let us be realistic.
Moreover, although I never attach great importance to whether people have contributed or not, or upon what principle they have contributed, if one does look at contributions, one finds that they have paid, for the most part, a flat-rate contribution and not an earnings-related contribution. I think that the hon. Gentleman will have to spell out his philosophy much more precisely before what he is saying is comprehensible. But I doubt whether it would be profitable to ask all the questions that his speech raised. After all, we are debating the Government's proposals and not the Tory manifesto on pensions.
The other part of the Amendment relates to the damage which the Opposition say will be done to the public service and other occupational schemes and to the flow of savings. Quite clearly, when any new scheme is introduced which has to be universal in its application, it is bound to affect existing pension schemes greater or less according to what the State scheme sets out to do. Hon.

Members on both sides will recall that the Beveridge scheme provided for power to be given to pension fund trustees to adjust their pension trusts to take account of the introduction of the Beveridge proposals.
We have a very substantial universal insurance scheme already, notwithstanding the contracting-out arrangements provided for in the scheme of ten years ago. Curiously enough, the universal element of the existing scheme has the higher contribution. That part of the existing two-tier scheme for which contracting out is provided has the lower of the two contributions. The flat-rate contribution for men at present is 17s. 8d. a week and the highest contribution for men in the graduated side of the scheme is 16s. 4d. a week. So the principle of universality has been accepted in the past and we still have it on a substantial basis, and if universality is to be continued in a new earnings-related scheme, clearly it is bound to have some effect on existing occupational schemes. In fact, there has been perhaps a growing effect on occupational schemes already by the rise in benefits and rise in contributions under the existing scheme.
In any case, as my right hon. Friend pointed out, important as the occupational schemes are, important as the flow of savings is, they are not the overriding considerations in dealing with social security for the whole nation. There has been plenty of time for the occupational scheme to show what it can do, but it has not done it. It has not provided transferability. There is more mischief done today to provision for retirement when people leave their occupational schemes than ought to be tolerated if we are to make adequate provision for retirement. Many people leaving their employment have refunds of their contributions often frittered away in current consumption and they are spending provision for their retirement.
I think that there is considerable scope for the improvement of occupational schemes when the worst has been said about the effects of the Bill upon them. Surely the man on £2,000 a year will not be content with the £700 a year pension that this scheme will give him on full maturity. He will want something better. Nor will the civil servant on £2,000 a year be content with the


£1,000 a year that his scheme will give him for 40 years' service. Many in occupational schemes have the disadvantage of going in late and not having the full benefit of the schemes they enter. The State scheme will go around with the insured person. That will be a great safeguard for his future.
Experience shows that with demand for higher standards going on the whole time, with a greater sense of the economic significance of retirement, more and more people will want to make provision for themselves over and above what is provided in this scheme. One of the things which is dawning on many people is that retirement inflicts the biggest pay cut they ever suffer. To slash their income by half, or a great deal more than half, is to provide serious economic difficulties on retirement. So far, the life assurance business, the deferred annuity business, the endowment policy business have all flourished notwithstanding increases in standards of social security.
There are, of course, aspects of the future which the noble Lord has described which show how sharply divided the parties are on the philosophy of the provision of social security. The State must go in where other effort has failed. Where voluntary effort and personal choice have made alternative provision it is desirable that it should then be adjusted to universal State provision. As my right hon. Friend pointed out, this is what has happened in many sections of the social services in the past.
I think that we must give some attention to the criticisms which are coming forward from those in occupational schemes, if only because they are the most vocal of the commentators on the Government's proposals. It is perhaps a healthy sign that young people under 43 are not unduly bothered about their superannuatiton. A young generation that goes around worrying about its pensions is not the virile, energetic body of young people that a "with-it" Britain wants in the world today. That is why the older people have to take care of the superannuation of the young. They do not trouble very much about it themselves, but those in occupational schemes are superannuation-sensitive. They understand their own in-

terests and their stake in the occupational schemes.
When I addressed a fairly large meeting in my constituency recently of N.A.L.G.O. members—police, firemen, teachers, bank officers and civil servants—I found that two things were worrying them most. First, there was the redistribution of income within the so-called superannuation scheme, and secondly, the uncertainty and fears about the changes in their occupational schemes which might be consequential upon the introduction of the new State scheme. The principle of redistribution within a universal and compulsory State scheme has not been seriously challenged—not even by the noble Lord, not by the new body, the United Kingdom Working Party on Superannuation, which obliged me by sending its document to me. It does not differ from the scheme in principle. Therefore, I am not sure that it is worth while spending very much time on the principle of redistribution within the State superannuaton scheme. By redistribution, we mean that contributions in the scheme will earn lower benefits for the higher-paid workers and higher benefits for the lower-paid workers in proportion to the amounts contributed. The scheme will be weighted in favour of the lower-paid worker.
This principle of redistribution has in modified form already been applied in the graduated pension scheme that the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) introduced 10 years ago. The first thing he did was to raid the graduated contributions so as to transfer money to the flat-rate scheme and so relieve him of the necessity of raising flat-rate contributions too high, but so that those who were fully contracted out should not escape their share of the redistribution of income provided for in the graduated income he imposed on those contracted out a 2s. 7d. a week more flat-rate contribution for the same flat-rate benefit. In that way they did not escape his predatory activities.
I once said that the right hon. Gentleman had turned the Ministry of Pensions and National Insurance into a "bucket shop". I would withdraw that now. Since we look for our Socialism in the most unexpected quarters, I think that I see traces of it in the 1959 scheme.


Therefore, I think that we can now turn to that scheme and rely at least on one of its underlying motives in justification for what we have in this Bill.
If we leave aside the principle of redistribution—and I believe that we can—we see a universal compulsory State scheme which is in a sense a form of taxation entitled to have its own internal social priorities. I believe that this has. Objection came from some of my audience who are left in a state of uncertainty as to the future of their occupational schemes. I think that is true. We all recognise that there is bound to be some "give" in some of the occupational schemes to enable an occupational scheme and the State scheme to be dovetailed to provide (a) a reasonable level of contribution, and (b), a satisfactory superannuation benefit. It may, therefore, be that the contributions to some occupational schemes will be lowered in order to provide modified benefits in harmony with the State scheme.
Now they say to me, "I shall be transferring to the State scheme a contribution which will have two disadvantages. One is that the contributions will be switched from a tax relief scheme to a non-tax relief scheme." This certainly is a matter which will have to be considered. The fact that high contributions under the State scheme will have no tax relief yet all contributions under an occupational scheme will be free of tax will certainly raise an anomaly which many people will wish to see removed. The second thing they say is, "Our contribution, switched from the occupational scheme to the State scheme, will not count to the extent of 20s. per £ towards our benefits. An element of redistribution will be imposed upon it."
At the moment, both those things may be true, but I stress that on the credit side they will be given, even though partially contracted out, full widows' benefit on a scale unusual in occupational schemes to-day; secondly, a wife's allowance will be provided, which again is not a usual feature of the occupational scheme; and, thirdly, which is also important, the State will up-value that part of the joint pension which is guaranteed by the occupational scheme. At present the up-valuation of occupational schemes is very ragged and, on the whole, un-

certain and unsatisfactory. It is a generous move to dynamise that part of the combined pension which is guaranteed by the occupational scheme. On hearing that proposal when I was dealing with these matters, I was not immediately attracted to it. A further consideration is the preservation of pensions in the public sector. That is a great move forward, even in the public sector.
The structural arrangements for contracting out are skilfully done and, on the whole, they are fair. I am not in a position to discuss whether the remission of contribution should be 1·3 or 1·5 per cent. For myself—and I say this only personally—I think that if many of the people marketing guaranteed annuities think that 1·3 is too low, and if they question the Government Actuary's judgment, I should be prepared to put the matter out to independent review and judgment, if any independent opinion is to be obtained in this field. But I would have no desire to impose a remission of contribution if some people think it unfair. I do not think that, on the whole, it is likely to prove unfair, but the criticism made of it is that the Government Actuary is a theoretician whereas those in the business are testing the market, and the market judgment, they say, is different from that of the Government Actuary.
I come to the fears about the consequences of partial contracting out. They have been exploited and probably exaggerated, but as long as there is uncertainty they cannot be removed. Unfortunately, the process of negotiation on these revised and probably modified occupational schemes will be intricate and lengthy. The uncertainties will persist for months. I presume that they must all be resolved by the appointed day in 1972, because then the new scheme will come into operation and the dovetailing will have to be completed by then. But there are millions of workers in these schemes who will not know where they stand with their occupational schemes until those negotiations are complete.
I raise with my right hon. Friend the Secretary of State the process of negotiation. I do not think that Chapter XIII on page 19 of the White Paper adequately covers this. I mention only one difficulty within my experience. Superannuation in the Civil Service is not


within the scope of negotiation on the Civil Service National Whitley Council. Will it be put in?
The noble Lord the Member for Hertford talks about freedom of choice, but in many cases there is no freedom of choice. Pension schemes are usually dictated by the employer. They are very infrequently negotiated with the unions or representatives of the staff. In the Civil Service, since an Act is necessary to modify the Civil Service scheme, there is never any formal negotiation on the Civil Service National Whitley Council about superannuation arrangements.
It is, therefore, the job of the Secretary of State or the First Secretary to ensure that there is adequate machinery everywhere for a review of the occupational schemes in the light of the proposed changes. Otherwise, we may face a certain amount of white-collar unrest, which it would be desirable to avoid.
I come to a question raised by the Life Offices' Association which was repeated in the Economist in a recent article. It suggests that it is wrong of the Government to promise the up-valuation of earnings year by year for the purpose of arriving at reckonable earnings on which the retirement pension shall be calculated. It suggests that all that the Government should promise is up-valuation by reference to the cost of living. Surely this is wrong. If we take life earnings as our basis for assessing pensions, we are bound to do something about writing them up in value so that the final calculation has some regard to the standard of living immediately before retirement.
In the case of a teacher, civil servant, or local government officer, we usually take the remuneration of the last three, five or six years. The assessable earnings for the purpose of calculating pensions are related, broadly, to what a person is getting at the time of retirement, and in most cases he was probably receiving more pay then than at any earlier time in his career. But, as my right hon. Friend the Secretary of State pointed out, the earnings of an industrial worker, as against those of a teacher or a person in the Civil Service, do not go up in a straight line on an incremental progression. They rise to middle age and

then begin to fall. That is why it was necessary to take life earnings as the assessable basis for calculating pensions.
But I do not see that it is a fair basis of valuation of earnings at the time of retirement only to up-value previous earnings by reference to the cost of living instead of by reference to the rise in earnings. We are, after all, considering earnings. Therefore, I would reject the suggestion that this is a wrong basis, and yet the Life Offices' Association and the Economist endorse it.
I end on a cautious note. Possibly there is a slight touch of pessimism here. I think that experience shows that in a free society there are distinct limits to the redistribution of income and resources by Act of Parliament. The forces of resistance are very strong indeed. What people are required to give up and do not want to give up they will not give up and, experience shows, do not give up. They will help themselves to the national cake. The corrupting influences of the capitalist system go with its incentives. It remains to be seen—and I am not sure about this—whether the next generation will honour the promissory notes that we are writing into this Bill. This is my gnawing doubt all the time.
The contract between the generations is being signed by only one party. [HON. MEMBERS: "Hear, hear."] I know. I do not always disagree with everything from the benches opposite. The fact that we may have a mutual doubt here does not mean that either of us is wrong. If, however, we are the only signatories to the contract between the generations, we have to be very careful before making the conditions for the next generation too hard.
We should have been on much stronger ground if we gave up to begin with the same proportion of our earnings which we shall ask others to give up later. This is where I may part company with the noble Lord. I think that our capacity and our willingness to forgo a marginal slice of current consumption should be equal to the call that we make upon others. That degree of funding would not be alien even to a pay-as-you-go scheme.
I know that at one time my right hon. Friend the Secretary of State envisaged substantial savings at the beginning of


the scheme which could be invested by National Insurance Commissioners, which would give the scheme the benefit of investment in equities and other hedges against inflation. We all know what happens to our money if we invest it with ourselves. We have a national insurance reserve fund of, I believe, £1,600 million, but nobody will ever see it again. It is a phantom fund, because it is invested with the Government. If we ever wanted it, the Government would either have to borrow more or tax more to pay us out, so we shall never see it again. But if we had savings which could be invested elsewhere and under the control of commissioners, we might be on a course which would make sense to the next generation and give us greater satisfaction ourselves.
There is nothing sacrosanct about a pay-as-you-go scheme. The reason we have it is that to have a fully funded State scheme is impossible, for all sorts of reasons. But we could surely save up for part of our pension instead of putting the whole of it on current and future contributions. The generation gap is wide enough already without adding to the tensions of excessive demands of the old upon the young. That is the danger of the scheme. That is why I am more disturbed still to see what has happened to the estimated balances in the earlier years as a result of the partial contracting-out arrangements and the effect upon the contribution revenue.
We are living from hand to mouth in this scheme right from the beginning. This is a very bad start. We could afford to pay more. We could afford to have a contribution which would give substantial margins to begin with and which would produce the benefit of investment later. When we were first looking at this scheme, one of the things that we had to decide was the sort of maximum joint contribution on which to proceed. I heard 14 per cent. mentioned at that time. We are not there yet in these proposals. I should think, therefore, that with greater expectations and with higher standards, we could have gone a little higher still. However, that is the one cloud, as big as a man's hand, hanging over the scheme. Only time will tell whether what we are doing is building soundly for the future without raising the same sort of thing that has arisen in

West Germany—the resentment of the young of the future against constant rises in the proportion of contributions in order to honour the promissory notes made out by those who went before. This needs very careful consideration before we finish with the Bill.

6.24 p.m.

Mr. Peter Fry: In making my maiden speech on this pensions Bill I had better start by declaring an interest since, as part of my business activities, I sell insurance. But it is not from that point of view that I want to look at the Bill. During the years that I have been meeting the general public, especially during the recent election campaign, I have been struck over and over again by the feeling prevalent among many of the elderly that they have been betrayed by the rest of society.
I received a letter only last week in which a constituent said:
To my mind, it appears that in this Welfare State of ours it is a crime to be old".
Therefore, in describing their feelings as those of betrayal, I do not think that I am being too extreme. In speaking out as I do, I know that my predecessor for the Wellingborough constituency, although he would have spoken from the benches opposite, never hesitated to speak up on behalf of his constituents and present their problems.
When people drawing the basic national insurance pension see wage awards announced which give increases in wages far higher than the total amount on which they have to live, they know that they are being left further and further behind in the battle to maintain reasonable living standards, and they can hardly be blamed if they feel bitter. It is all very well to talk about the overall level of prices, but pensioners know that the essentials of life—milk, bread and coal, for example—have all gone up in price and will continue to go up by a far greater percentage than is reflected in the general rise in the cost of living. If we want to talk about a just society, it is impossible to avoid the conclusion that the scales have been tipped against the old. It is my opinion that we should now adjust the balance.
I give the Secretary of State full credit for wanting to do something to end the


anomalies, and I applaud his motives, but I question whether this is the right way to do it. I suggest that it is not. In the first place, it does absolutely nothing for the many people over the age of 80 who have no pension, and it does nothing really for the many existing pensioners. In a Bill of this scale, it should have been possible to do something for both those categories. Simply tying future pensions to the rise in the cost of living ignores the special needs of the elderly and the fact that increases in the price of one or two basic commodities can completely disrupt their budget.
What strikes me as being so unfair in We Bill is that the new pensions are to be paid for by our children and our grandchildren. These pensions are much higher than we of this generation are prepared to pay our elderly today. We should ask ourselves what right we have to commit posterity to a cost and a responsibility that we are not ourselves prepared to accept today.
The second reason why I oppose the Bill in its present form is that it will mean heavier contributions from employers and from the greater part of the working population before too long at the present rate of inflation. Dress it up as we may, this will still be regarded as a further compulsory burden on the employers and a further compulsory deduction from the wage packet. Pensions should be seen by the contributor as a deferment of the enjoyment of earnings now in exchange for the benefit of an income in the years when one has ceased to work. Only in this light can they been seen as genuine savings.
The trouble with the Government's Bill is that by many it will not be viewed as a method of saving for one's retirement, but as just another attempt to raise taxation. It is the psychological effect of introducing a Bill on this scale which will have so dampening an effect. Under almost all private pension schemes, the employer regards the expenditure as reasonable as an additional benefit given to the employee, and the employee, on his part, willingly gives up his contribution, sees it as a deliberate method of saving and does not immediately ask for a wage increase to cover the cost.
The real danger of the Bill, therefore, as at present envisaged is that it will defeat many of its own declared objectives in that it will be grossly inflationary. This, in turn, can only drive up the level of contributions to cover the increases in benefits which have become necessary. Surely it is more advantageous to the economy as a whole to encourage more and more people to enter into private schemes and to relieve the State—that is, the taxpayers—from the financial responsibility of ensuring that the majority of our elderly are in receipt of adequate income.
To achieve this, the minimum requirements of the private pension schemes, that is to say, the value of the pension, widows' rights, death benefits, should all be stipulated and laid down and approved by the Government. It is quite true that this would still leave many people who would not be able to go into private schemes, perhaps because of their age, perhaps because of the length of their employment, perhaps because they work for a small firm, but if it were possible to ensure full transferability many of these could be taken care of; and surely it would be much easier to deal with these people by adaptation of the present scheme and through supplementary benefits paid for by taxation. It would be equitable so to do, because people in the private schemes would be gaining the benefit of tax relief, not only on their own contributions but on those paid by their employers.
It appears to me to be totally unnecessary to create a monolith which will become a major source of inflation in order to care for what could well be a minority of the population. Why should all the people who are at the moment in private schemes be forced to enter into the new Government scheme? I would suggest that by encouraging the major part of the working population to go into private schemes we shall be able to reduce the inflationary spiral which will result from introducing the Government scheme.
The fundamental need of every retired person is security. No matter how well-intentioned, a scheme which has the effect of continually forcing up prices and continually contributing towards the erosion of savings cannot be regarded as fulfilling this need, and, therefore, the Bill


cannot possibly be seen as fulfilling the need to give security. Should the Bill ever become law one of the very real dangers will be that a vast amount of money will no longer be available for investment by the administrators of the private pension schemes. After all, their job is to invest wisely and profitably. Once again, it is a case of the Government professing to know better than the experts whose reputation depends on their own success.
The Government themselves are deliberately planning on such a transfer of funds from 1972 onwards to expand their outlay on pensions, partly by diverting into the State scheme money which would otherwise go into private schemes. The effect of this will be that many people will say, "There is no point in saving any longer: the State will provide". I suggest that it is rather woolly minded of the Government to introduce a Bill of this nature at the same time as they are desperately trying to raise the level of private savings. It would only have the effect of turning savings into consumption, and this is something which, I should have thought, any Government would wish to avoid.
Another weakness of the scheme is the adverse effect it will have on existing pension schemes. The scope of the Bill is such that most existing schemes will have to be considerably modified, and the timed implementation of the Bill can only mean much more confusion, bearing in mind how long it takes to alter a scheme and to get approval of the Inland Revenue. One of the most disturbing effects will be on small pension schemes. I have no hesitation in saying that many small private schemes will completely disappear. This is yet another oblique attack upon the small firms of this country. By and large it will be the large firms which will tend to continue their own private schemes. The small firms will find it more difficult, more complicated, and, therefore, they will have much more difficulty in recruiting suitable labour. There is very great danger in keeping adding to these attacks upon the small firms in our economy.
To sum up, this Bill should not be regarded as an extension of the Welfare State, but rather as another step towards ensuring that only the State can be entrusted with welfare. This I believe to

be a most dangerous doctrine, because it strikes at the fundamental need for responsibility to be encouraged in each and every individual to contribute towards his own well-being by making a deliberate and conscious choice in deciding how he will allocate his earnings, how he will spend his earnings on present consumption and how he will save for the future.
For these reasons I support the Amendment and I oppose the Bill.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I would remind the House that this is not a very long debate, that many hon. Members wish to speak, and that brief speeches will help.

6.35 p.m.

Mr. Michael Barnes: I am very glad to follow the hon. Gentleman the Member for Wellingborough (Mr. Fry) and I would like to congratulate him on his speech, although I myself do not necessarily agree with everything he said. I am particularly glad to follow him because at one time he lived and was politically active in the Wycombe constituency, which I contested in 1964. I can tell the House that it was the view of his political opponents that he was a very able politician, and I am sure that this is a view which this House will come to as well before long.
In recent months, and particularly in the last debate before Christmas, so much of the discussion of the provisions of this Bill has been about the terms of contracting out and the terms of abatement. Today I should like to look at the wider issue. What does the new pension scheme offer to the people of this country? First, I would say that surely what we all want out of any pension scheme is that it will for the largest possible number of people close the gap in living standards which they have to face after they stop working when they retire. What I think divides us is, how best this gap should be closed.
We believe that this new, greatly improved State scheme is necessary. There is no argument about the fact that it should be earnings-related, as we believe it should be. We believe it must, as it does, offer benefits which occupational schemes find it difficult to offer, such as widowhood cover, inflation proofing, and the preservation of pension rights when


people move from one job to another, and it must, also, in our view, provide a really comprehensive basis for life in old age which is adequate for those who are not covered by occupational schemes.
We believe that it is in everybody's interest, whether in an occupational scheme or not, to take part in this scheme, but that is not to minimise the rôle of occupational schemes. I think that it is rather to say that what they now have to do is to adapt to the existence of this new and greatly improved State scheme.
So I welcome the Bill for many of the reasons mentioned by my right hon. Friend, particularly the reason that it will end the two classes of pensioner we have at the moment—those, on the one hand, who have the present State scheme and an occupational scheme through their jobs, and those who have only the present State pension which has to be supported in so many cases—in over 2 million cases—by recourse to supplementary benefit. The scheme does it by paying, for example, to a man on average wages when he retires, if his pension is fully matured, a pension of £10 5s. a week at 1969 prices, which is revalued in line with earnings as earnings increase, and which is proof against inflation after retirement.
There are several criticisms which have been made and I want now to turn to one or two of them. I think that it was the right hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) who, in the last debate, described this scheme as a step towards nationalisation of the provision for old age. I think that it would be more accurate to speak of basic or adequate provision for old age, but I would not quarrel greatly with that description. Hon. Gentlemen opposite use the word "nationalisation" only in a pejorative sense, and they do so here because they see that this is in a very real sense a Socialist Measure. Having recognised it as a Socialist Measure, the mistake they make is to expect it to conform to many of the criteria of the private insurance world.
For example, in certain contexts it is said that the scheme is not a properly funded scheme. Surely a State scheme on a pay-as-you-go basis, in which contributions rise as earnings increase, and which ensures that the standard of living of pensioners is maintained in relation to the

working population, is just as sound as a private pension fund, which is subject to the fluctuations of the investment market and offers little protection against inflation after retirement. The scheme is redistributive; it gives people with lower incomes better value for money.
Another criticism that is made is that the redistribution of incomes is the responsibility of taxation and should not be brought into a pension scheme. One cannot through the tax system redistribute income to people who pay little or no income tax unless there is a form of negative income tax. We need to redistribute money to people in this category through pension schemes, so as to get away from the present reliance on supplementary benefit.
In the context of taxation, another point which underlines the need for a scheme like this is that in the years ahead there will be a shift in the balance of taxation from direct to indirect taxation which an increasing number of people—certainly I and some of my hon. Friends—are prepared to accept. If this happens a burden will be placed inevitably on pensioners, and for this reason any plan must provide a solid and comprehensive pension provision.
The only other criticism I wish to refer to is the controversy about what is called the contract between the generations. The criticism which has been made several times this afternoon is that by this scheme the present generation is promising that its children will pay it more generous pensions in terms of the percentage contributions they pay than the present generation is prepared to pay the old of today. If one accepts that criticism entirely, one is making the mistake of talking about this scheme too much in insurance terms and taking it out of the social context of which it is designed to be a part. It is designed, surely, to provide a comprehensive basis for closing the gap between one's standard of living when at work and on retirement.
That society should have such an objective is totally in line with the way we are developing in this country, in the same way as we feel it necessary to devote to the education of our children resources which give them opportunities which many adults of the present generation did not have, so we can surely look to the


next generation to continue this task of closing the gap between living standards when people are working and when they are retired.
An earnings-related scheme cannot be achieved overnight, but must be built up gradually over a period of time. We are not talking here about an insurance scheme where money is invested and, having grown, is paid out to the people who have contributed. We are talking about something much more like a social service, a way in which society will provide for the problems of old age. It is a way of providing for old age which is financed separately from taxation, but it could just as well have been financed out of taxation had people thought this was a more acceptable way of doing it. For these reasons I am not nearly so worried about the argument of the unfairness between the generations as the hon. Member for Hertford (Lord Balniel) and my right hon. Friend the Member for Sowerby (Mr. Houghton).
To conclude, the mistake many people make, particularly the Opposition, is to criticise the Bill too much within the context of private insurance schemes, when really their objection is simply a political one. This way of approaching the problem is not politically acceptable to them, but it is politically acceptable to us. I believe that it will be to a large number of people in the country, and increasingly so as they learn more about how the scheme will operate and what it will mean for them. For these reasons, I congratulate my right hon. Friend on the way in which he presented the Bill this afternoon.

6.46 p.m.

Mr. John Boyd-Carpenter: I should declare a possible interest. As the House, I think, knows, I am chairman of an insurance company, and, although my company does not operate in the life or pensions field, at least I suppose theoretically there might be an interest.
May I join in the congratulations which the hon. Member for Brentford and Chiswick (Mr. Barnes) so rightly expressed to my hon. Friend the Member for Wellingborough (Mr. Fry)? Indeed, I have the advantage over him in that I agree with every word my hon. Friend said, which naturally heightens my appre-

ciation of what was a courageous and realistic speech. I am glad that he abandoned the foolish old convention of making a non-controversial maiden speech, and made instead a robustly controversial one on a controversial matter. I hope that we shall hear him often.
The right hon. Member for Sowerby (Mr. Houghton) has the agreeable and likeable characteristic that, however hard he tries, he cannot help letting fairness to the other side break through. He showed this both at the beginning and at the end of his speech. His right hon. Friend had been contrasting, in his characteristic way, the terrible neglect of the pensioner under the Conservatives compared with his own enlightened Administration. But the right hon. Member for Sowerby blew the bottom straight out of that when he said frankly that under the Conservative Government, as under the present one, the pensioners had had an increase in their pension bigger than is provided by the Bill in respect of price increases, and that this happened under both Governments.
This is indeed true. The right hon. Gentleman the Secretary of State gave 20 per cent. as the increase in real terms in the 5¼ years of Labour government. The figure for the 13 years of Conservative government was 50 per cent. for the general level of benefits, and, if I may reply to the right hon. Gentleman's emphasis on certain particular benefits, it is possible to claim on behalf of the Conservative Government that in the sector to which we gave the greatest attention, that of the widowed mother with children, for a widowed mother with three children the increase in real terms between 1951 and 1964 was 100 per cent.
I was, however, a little shaken when the right hon. Gentleman detected bits of Socialism in the 1959 Act. Perhaps that explains why the Secretary of State called it a "swindle". I am indebted to the right hon. Member for Sowerby for the first rational explanation of his right hon. Friend's repeated commentary. However, I would not like to take credit, even in the right hon. Gentleman's eyes, undeservedly, because under that scheme each contribution, whatever the total earnings of the contributor, purchased the identical amount of pension. What was done—I suggest that the same should be done under this Measure—was


to use the Exchequer contribution to help the poorer, lower-paid workers so that they might secure a proper flat-rate benefit.
You have pointed out, Mr. Speaker, that time is short in this debate. I will not waste that time, save to mention that it seems a parliamentary outrage that a Bill of this sort, which the Secretary of State himself described as a major social Measure and which contains 129 Clauses and goodness knows how many Schedules, should have its Second Reading in just over five-and-a-half hours.
At Business Question Time before the House rose I asked for two days to be given for this debate. We are now having one day. It is even less than that, for reasons for which the right hon. Gentleman cannot be held responsible, but which might have been foreseen would occur on the first day back after a recess. It is only 5 hours and 35 minutes. The Bill, if it comes into operation—that is a substantial "if" and is even more substantial following the speech of my noble Friend—will affect every one of our constituents, and I therefore protest at its handling by the Government.
I regret, too, that we should be taking this Bill as an avowedly party and partisan Measure. The Secretary of State knows that I begged him for two years and more to appoint a new Beveridge Committee and try to get the changes in pensions which we all appreciate must take place brought forward as the result of a detailed and impartial investigation and so to ensure that those changes have a large consensus of support behind them.
Pension matters, and particularly pension matters of this kind, need that support because, in the nature of things, they must run for a long time. They must endure. The pity of the right hon. Gentleman's handling of the matter in this way is that he has made it absolutely certain that, should the Measure ever come into operation, it will not endure. There will be a great deal of hard work for the able officials of his Department and for people in the pensions sphere generally. There will then have to be further fundamental changes.
The right hon. Gentleman has emphasised this party nature by placing in the title of the Bill the words

"National Superannuation". Hon. Members who were in the House in earlier years will remember the right hon. Gentleman coming forward with almost an annual edition of national superannuation. In those days he was on the Opposition benches. To give him credit where credit is due, I believe that his efforts greatly contributed to the victory of the Conservatives at the 1959 General Election.
Now, on the other hand, the label conceals something. In those days the theme was "half pay on retirement". There has been a long retreat from that. That retreat began discreetly in the Labour Party's 1964 manifesto, when it was half pay on retirement, the objective being half pay on retirement for the man on average earnings. Now the right hon. Gentleman has retreated further and it is half pay on retirement for that section of society which is not at present more than 42 years of age and which earns not much more than half average earnings throughout its working life. This has been the long retreat which the label should not attempt to disguise.
I will not weary the House by elaborating a number of points which I have put before, but I must mention briefly the four main reasons why this is a bad Bill and why I am sure that another Government will have to deal with it radically, and, I hope, repeal it. First, it is too big. It goes too high up the earnings scale. It nationalises far too much of the provision for old age.
Secondly, it provides for no real contracting out. Abatement on this modest scale is not contracting out in the true sense. The combination of these two factors will inevitably do damage to the occupational schemes, as the Secretary of State admitted.
Thirdly, one must consider its redistributive effect. This is wrong in national insurance and it aggravates the difficulties involved in providing even a proper system of abatement. If one redistributes between the higher and lower earners, then employers will, of course, want to contract out the higher earners and keep the lower earners in. Thus, one must hedge one's abatement provisions about with all sorts of restrictions.
Fourthly, there is this so-called dynamism on which the right hon. Gentleman


so prides himself. This is a wrong principle and I hope that the Secretary of State will not simply take the easy point and tell me, "You are seeking to criticise the generosity of my provision for pensioners." He is not being generous. Indeed, he is not providing a penny for existing pensioners. Existing pensioners will be wholly unaffected by the Bill. What he is doing is bidding for the generosity of another generation, and this is why I very much share the apprehensions and doubts of the right hon. Member for Sowerby, with his gift for biblical quotations and references. I agree with his reference to a cloud not much larger than a man's hand. I am tempted to recall that the devil can cite Scripture for his purpose.
What the Secretary of State is seeking to do by this dynamism is to persuade another generation to allow us to preempt its own priorities so as to provide pensions which go a good deal beyond mere basic provision and in respect of which public money is put in in larger degree the larger the pension one has.
It is not to be assumed that any future generation, with its own problems, will regard this as so self-evidently right that it will necessarily do it; and when we are doing this without putting aside a penny to finance these obligations and without hypothecating any resources to produce the necessary income, there must be real doubt as to whether posterity will De prepared to accept the heritage which the right hon. Gentleman proposes to leave it. It was Jorrocks who remarked, "Beware of presents that eat".
I now want to deal with a number of important points which arise on the Bill itself. There is the departure which is proposed from the principle of national insurance that employer and employee's contributions should match. I am not referring to percentages like 7 as against 6¾ but to the fact that the employer's contribution goes right up the salary scale and, indeed, amounts to a 7 per cent. levy on his wages bill. This is not insurance in any sense, but a tax.
To judge the effect of this one can take the case of a local authority which pays its town clerk, say, £5,000 a year, a not unusual figure. Under this provision the local authority will have to find £350 a year as its national insurance contribution for the town clerk. Even

if it abates, it will have to find well over £300. Three-fifths of that will not buy the town clerk any pension whatever. But it will come from the funds of that local authority which otherwise might have been made available for other pension provision for that town clerk. If employers generally are made to pay these very large contributions on the higher salaries, there will be fewer funds available for other pension provisions, even though the contributions are paid on earnings in respect of which the State makes no pension provision.
If one takes, as an extreme example, the sort of earnings which this Government think right to allow to the Steel Corporation, the figures become quite incredible. On the levels of earnings allowed for members of the higher management and Board of the British Steel Corporation, which are between £22,000 and £24,000 a year, the national insurance employers' contribution works out at about £1,680 per year. That will not be helpful either to alternative pension provision or in keeping down the costs of British industry, and it is a singularly unfortunate part of the scheme.
There are only one or two other points about the Bill which I wish to make. There is the failure to provide that an employee's contribution shall be allowed for income tax purposes. It used to be the case that it was allowed as a deduction, but, with the introduction of the 1959 Act, it was thought too difficult because the contributions might vary, and an increase in the personal allowance was made broadly equivalent to the average of contributions. With these very much increased contributions, I would like to know whether the Government are proposing to allow contributions to be treated as deductible for income tax purposes. All the contributions are to be collected through the Inland Revenue, and there would not seem to be any difficulty in securing that that body, if it is not on strike or going slow, should make the calculation and allow the full contributions as a deduction for tax. There are few things more irritating than being taxed on income that one has not got. It is bad for incentives and bad for the temper. I hope that the Government will be prepared to look at this again, because it seems to be extremely unfair. In this


respect, the employer is all right. His contribtuion is, I think, allowed for tax. But there is a real difficulty in respect of the employee.
There is a point made in paragraph 62 of the White Paper that contribution increases and benefit increases shall be legislated through by Statutory Instrument. That is an objectionable proposal. I know that it is convenient for the Government in that it saves parliamentary time. But the House will appreciate that it denies us any opportunity of amendment. In respect of benefits, the House has considerable powers of amendment at present. The wisdom of the Chair has ruled that one can move to increase national insurance benefits because the charge falls on the national insurance funds and not on the Exchequer. But if one is faced with a Statutory Instrument in which the Government are making an increase in benefits, the House does not have adequate power. It is presented with the dreary choice between rejecting the increase or accepting an inadequate one. Equally, an increase in national insurance contributions is a major matter of taxation, if it is substantial. Surely we should have the same power to move a reduction when, as on a Finance Bill, a tax increase is proposed.
There is the further complication that the Statutory Instruments and the Motion to approve them would not have the benefit of an unlimited period for debate in the House, as tax Orders do. They would have only the usual hour and a half exemption after 10 o'clock.
As to the proposal about married women, I find it unfortunate. It is said to be in their interests. If it is in their interests, why are they not left to choose? Why are they being deprived of that option? It ill becomes the right hon. Gentleman to say that this is so beneficial that they shall not have the choice that they have at present of opting out.
I come finally to the date on which the Bill is planned to come into operation. I assume that April, 1972, has been long since abandoned. Obviously the administrative proposals are nothing like far enough forward, and obviously the submissions being made are too complicated for that. However, I would like an assurance of that sort, because it would

save a great deal of trouble for those concerned.
I would like one other assurance. The right hon. Gentleman is out of the Chamber at the moment, but he was courteous enough to write to me the other day about an answer to a Parliamentary Question which he gave me on 5th November. It related to the very important point about what is to happen to Civil Service pensions if the proposed scheme comes into operation. I understood the right hon. Gentleman to assure me that Civil Service pensions, which are non-contributory, would not be cut back to make room for the contributory national insurance scheme in any circumstances. I read what he said as saying that. I am not suggesting that he tried to mislead the House, because I know how easy it is to give an inaccurate impression in answer to a supplementary question, but his letter to me suggests that he was not meaning to give that assurance. If he was not, a serious matter arises both for the Civil Service and for the Armed Forces. Both have a noncontributory pension as one of their conditions of service. If that is to be eroded to make room for a pension to which they have to contribute, there is a real worsening of their terms of service. With recruiting to the Armed Forces in its present parlous condition, it would be an act of folly to do that.
I could make many more comments on this enormous Bill, which will be quite inadequately discussed tonight. Perhaps fortunately, there is a good deal of unreality about the debate. If the Government had really thought that the scheme would ever operate, they would have introduced it three years ago, as the right hon. Member for Sowerby made clear. I would advise those who manage and are concerned about occupational schemes not to panic. The question of operating this Measure will lie not in the right hon. Gentleman's hands but in other and more competent ones.
Hon. Members may on occasion have had a bad dream and woken up suddenly and been relieved to find themselves in the clear, sane light of day. I think that that will be the experience of those who are concerned with this Bill. The right hon. Gentleman is so free with adjectives about other peoples' proposals that I would like to christen this Measure


"Crossman's nightmare". I say to those outside that it is no more than that. When one wakes up, one will find that it has not happened.

7.9 p.m.

Mr. Peter Archer: It is not often that it is my privilege to agree with a remark which falls from the lips of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). But I share his disappointment at the short time available for this debate. I hope that he will accept that that is why I do not follow him into the many interesting points which he has raised, though I understand that my hon. Friend the Member for Ealing, North (Mr. Molloy) may seek an opportunity to do so later. The right hon. Gentleman must not assume that silence implies assent. We may have other opportunities for discussing his views.
But I am grateful to the right hon. Gentleman for repudiating so vigorously the title of "Socialist". If he had been held up to us as a model of a Socialist, a number of my hon. Friends might have had to do some rethinking.
It is not often that the contents of a Bill are so fully discussed, analysed and debated before they are reduced to Bill form as the contents of this Measure have been. Those of us who have taken part in earlier debates are already familiar with one another's viewpoints, and even debating points. However, I seize this opportunity to suggest that we return to some of the basic principles of the Bill, so that the public may have an opportunity of seeing what common ground there is on those principles and where the issues lie.
I suggest that this Bill is a harmony of three essential principles. The first is that the persons for whom we are providing should receive pensions which are adequate, not only in the sense that they raise them above the breadline—the Speenhamland test—but that they should prevent a sudden fall in the standards to which the people have become accustomed throughout their working lives, and should also provide an adequate share in increasing national prosperity.
The second principle is that the cost should be borne—and seen to be borne—

at least partially from contributions which are specifically designated as referable to the benefits.
The third principle is that no person should bear a proportion of the cost which is unacceptable having regard to his income.
I will briefly examine those three principles. The first, that the pensions should be adequate, in the sense in which I attempted to define them, seems to be an issue between us. It is quite clear that right hon. and hon. Gentlemen opposite believe that a scheme which is provided by the Government should have a very different definition of what is adequate. On the Opposition's view, more adequate provision ought to be left to private schemes, notwithstanding the fact that so far we have received no answers to the objection that these schemes are clearly not normally transferable, that they do not provide a number of benefits provided in this scheme, such as those for widows and wives, and that they are not inflation-proof in the same way. Nevertheless it is still maintained by the benches opposite that this kind of provision should be met by private schemes and that the vast majority of employees for whom these schemes are not available should simply reconcile themselves to the fact that it is so much the worse for them.
As I understand it, it is also suggested that it is an infringement of a man's liberty—and the noble Lord the Member for Hertford (Lord Balniel) has said this on a number of occasions—to provide for his own future if he is compelled to enter the kind of scheme we are discussing tonight. I am sorry the noble Lord did not give way during his speech because he might have been able to answer this point. It is by no means clear to me that a person's freedom is greatly enlarged by being compelled to enter a scheme decided by an employer, as compared with being compelled to enter a Government scheme. Perhaps at some stage right hon. Gentlemen opposite will elaborate this point.
One rather gets the impression—I have said this before—that what right hon. and hon. Members opposite are saying is that public schemes of any kind should provide a basic minimum, and that anything over and above a basic minimum should be left to private provision; that the


community should provide only those things which are left over for those unable to afford anything better.
This is reaffirmed by the opening sentence of "Social Security in the Seventies", an interesting document which incidentally, Mr. Speaker, was published at 2s. 6d. in 1966, as opposed to ls. which is charged for our publication. That document begins:
If we take the community's rôle to be that of ensuring a basic minimum level of security".
The document develops the programme from there. That is an issue between us because we on this side of the House do not take the community's rôle as that of providing a basic minimum level of security.
I was rather surprised to see the noble Lord coming out in a new rôle as a leader of the new Left. Some of my hon. Friends have criticised the idea of an earnings-related benefit on the ground that it perpetuated into pensionable age inequalities which existed in the earnings period. There was a time when I was a little exercised by this point. I was a little surprised when the noble Lord said tonight that he is now an egalitarian. My own feelings now are that it is too late to iron out inequalities after pensionable age. The time when we should be doing the ironing out is during the period of earning, and I hope that during the lifetime of this Government we shall be able to do something along those lines. I should be surprised if it came from the benches opposite that they were seriously anxious to iron out inequality in this way.
The second principle—the contributory principle—is one to which I confess I am a fairly recent convert and I hope there will be appropriate joy in the Ministerial heaven. At one time I was seriously exercised that any part of the burden of social insurance should fall upon those least able to bear it, and I should have preferred to see it fall on the Treasury, so that it could be provided from income tax according to a formula designed to impose it according to ability to pay.
I think it was my right hon. Friend the Member for Sowerby (Mr. Houghton) who convinced me that I was wrong about this. I was wrong for the same kind of reason as the hon. Gentleman was wrong

in criticising the inequalities in earnings-related benefit. We are not talking about figures, statistics and the sort of things which go into computers. We are talking about men and women who, over a long period, have developed their own ways of life and have their own views on these matters. They want to be consulted. I am a great believer in consultation, and people ought to be able to see clearly some relationship between what they are called upon to contribute and what they receive. Of course there is not a mathematical or actuarial relationship. Indeed, I should have liked to see greater redistribution in the Bill. I am a little sorry that my right hon. Friend stuck to the 18 per cent. Treasury contribution and I hope that he does not regard this as immutable, provided that there is some contributory principle. But it should be clear, and manifestly clear, to the public that some relationship exists. The public should understand that those who contribute to the scheme have a moral right to receive benefits. This principle is now clearly established and is not at issue between the parties.
The third principle is that no one should have to bear any part of the burden in a manner disproportionate to his earnings. This entails, firstly, that contributions should be earnings-related. What was wrong, right from the beginning, with the Beveridge flat-rate contribution was that if one wanted a scheme adequate to modern needs, then the burden of contributions would fall upon the lower income groups in a manner out of proportion to their income. Even with an earnings-related contribution, the same thing can be said about a scheme which is funded in the way in which the Opposition have suggested that they would like the scheme funded.
I have never seen either the moral or the economic necessity of having a funded scheme, provided one could achieve the same objectives without funding. If there is the kind of contract between the generations which no Government are able to break, there is no necessity for a funded scheme. With a funded scheme the burden upon the existing generation of wage earners would be quite impossible. I was rather inclined to put the matter the other way round. I do not share the pessimism of my right hon. Friend the Member for Sowerby about the feeling of future generations that they have a


grievance against their elders. Every young person to whom I speak, whatever else he or she might feel—and our discussions usually include violent quarrels—is quite adamant to ensure that he does his part towards providing for the older generation and never seems to feel any resentment at all about it. I would only have wished that we were doing for our parents what we properly expect our children to do for us, that the provision which we made for existing pensioners—and here I agree with certain right hon. Members opposite—had been rather more generous than it is.
Of course it cannot be a criticism of the Bill that it does not do anything for existing pensioners. How could it? But that does not excuse the Government from making adequate provision elsewhere. I accept my right hon. Friend's figures, which show that the provision in real terms is now 20 per cent. better than it was when right hon. Gentlemen opposite left office, but some of us on this side of the House do not regard 20 per cent. better than the Tories as good enough. I would not have complained if a higher burden had been imposed in the interests of existing pensioners.
I would like briefly to mention two criticisms of the Bill which may raise a difference between the Government Front Bench and Government supporters, although I hasten to say that I cannot imagine that we shall obtain the support of hon. Members opposite. The first relates to the arrangement by which it is proposed to calculate the benefits on an average taken over the whole of a person's working life. There must be occasions in everyone's life when, for reasons which to him seem good, he is prepared to accept a period when his earnings are low. It may be that late in life he suddenly realises his true vocation, or the job in which he would be happier, or in which he could make a better contribution, and he may wish to undergo a period of training for it, or at the beginning of his life, before settling down to a steady job, he may wish to go abroad as a volunteer in the developing countries, or to undertake what may be the modern equivalent of the eighteenth century grand tour.
For all of us the pressures to conform are sufficient without adding to them. Let us not discourage the Gaugins of this

world from occasionally breaking away. I give notice that in Committee I shall suggest to my right hon. Friend that, in calculating a person's average earnings, he deducts from the total of his working life a maximum of, say, the two years which represent his lowest earnings, so that people are not discouraged from facing a period of reduced earnings.
My final comment arises from Clause 15. We have been promised that something would be done about the provision which disqualifies an employee from unemployment and sickness benefit if he has lost work owing to a dispute at his place of employment. That promise has been honoured. However, there are some of us who are still not happy about the new formula. We are not happy about the use of expressions such as "participating in" or "directly interested in" a trade dispute. We have been there before, and we have seen the way in which in practice these expressions have been construed, and they have not been construed in favour of the employee.
There is still every incentive for employees to insist on a closed shop, so that not all the employees will be disqualified because of one person in the whole of the shop who happens to belong to a different union, and it still places on the employee the burden of proof. Very often it is a burden of proof in relation to matters on which he is no better informed than the national insurance officer, and infinitely worse placed to find out. This, too, is a matter about which some of us do not feel happy and we shall raise it in Committee if we are fortunate enough to be selected for the Committee.
But may I give my right hon. Friend this assurance? He will not necessarily find that we on this side of the House give him a clear run throughout; but he will find that on these matters of principle where there is a deep division between the two sides of the House, we shall be on his side.

Mr. Speaker: Miss Mervyn Pike, whom we welcome back to our debates after her illness.

7.25 p.m.

Miss Mervyn Pike: Thank you very much Mr. Speaker. An arthritic back does not make easy sitting in the House of Commons, but now, thank


goodness, it is cured and I am afraid that you will have to put up with much more of me in our debates. However, I promise not to over-stay my welcome by following up all the points which have been made in the debate so far. Unlike the hon. Member for Rowley Regis and Tipton (Mr. Peter Archer), I have not had the opportunity to make any of my debating points, or even to comment on these matters. However, I hope to be able to join issue with the hon. Gentleman in Committee.
The hon. Gentleman may be surprised to find that I agree with his penultimate comment. One of my great criticisms of the Bill is that it is socially irrelevant in the circumstances of modern times. It puts our society in a straitjacket and it does not face the sort of conditions of life which young people expect now and which they will increasingly expect over the next 20 or 30 years. I agree with the hon. Gentleman that young people may want to give some sort of community service or to travel the world, but the provision of a flexible type of private occupational scheme would give them a far better chance of meeting conditions of life in the next 20 or 30 years.
My main criticism of the Bill is that in the present situation it is financially irresponsible. We have great responsibilities to those whose standards have been left behind for one reason or another, largely because of the erosion of inflation, largely because of the disparity between their earnings and modern earnings or the disparity between modern earnings and the savings which they were able to make. The hon. Gentleman said that the purpose of the Bill was not just to help them. However, even in the context in which we could help them, we are not to do so, and even in 1972 they will be left in a worse situation. Nothing particular is being done to help them.
The Bill is financially irresponsible also because it is wasteful at a time when we cannot afford to be wasteful. It is administratively wasteful. The White Paper says that its initial cost will be about £106 million. I believe that it will probably be a great deal more than that, perhaps as much as £120 million purely in administrative costs for industry, and this at a time when industry can ill afford

additional burdens, at a time when industry is flooded with taxation burdens.
The Bill is administratively wasteful and it will act as a disincentive to saving. This can be argued one way or the other. The right hon. Gentleman, who always manages to blind me with science however much I think that I will not listen to the over-sauveness of his arguments, says that these things have not happened in Sweden and that in Sweden there has been a tremendous increase in savings. But one can go only on one's own judgment and knowledge of the society in which one lives, and I know that a large proportion of the savings of many people is in occupational pension schemes, and when those schemes are wound up, that saving will be largely lost. The right hon. Gentleman says that it is only the growth in savings which will be lost; but that is what is most important. We must have a growth in savings now. To bring in a Measure at this time which militates against an incentive for personal savings is irresponsible as well as a waste of the public well-being.
The right hon. Gentleman tried to preempt all the arguments about incomprehensibility. I know that I do not understand pension computations and problems. In this sort of debate I always feel at a tremendous advantage, because I know that I can be bowled out by an awkward googly question; I always go to the experts, and from them I usually get lots of notes. But in this instance the experts have kept telling me that the matter was too complicated and that the Bill was incomprehensible. Either the experts are wrong or the right hon. Gentleman is wrong.
I think that the experts are right. The more the right hon. Gentleman has tried to convince me that the scheme is simple, the more I have become blinded by its science. If it is incomprehensible to us, that is a serious fault. I accept the criticism that the present scheme is incomprehensible, and that is why I have never liked it. I believe that our pension arrangements must be as simple as possible.
I spend much of my time in industry, and much of my experience comes from industry. One of the great disincentives and one of the great suspicions today concerns the tremendous deductions from


the weekly wage packet. No matter how one tries to explain that people are getting value for money, they feel that they are being "done" in some way and that "they" are taking the money away. So higher contributions, particularly of the nature that we will see imposed on the lower-paid income groups, will add to this suspicion and difficulty.
It is impossible to do the calculations. I know the five criteria that we have to accept. I know that we must trust the computer at the end of the day. But those of us who have had any dealings with people facing redundancy and trying to decide what are their redundancy and superannuation payments, and all the rest, know how difficult it is now to convince people that they are getting justice. This will be even more difficult in future.
I think it was the right hon. Member for Sowerby (Mr. Houghton) who said that those of us who have personal superannuation rights take a closer and greater interest in them. My experience in industry is that where a firm has occupational pension schemes the employees of that firm take a great interest in the conditions of those schemes. They probably do not know the first thing about the State scheme; they brush it aside as something that the Government are controlling. But they feel that they have some influence over the firm's scheme.
The Secretary of State for Employment and Productivity said recently that power was moving to the factory floor. To some extent she is probably right. Those of us who have to do with wage bargaining know what tremendous power there is there and how closely the occupational pension schemes are followed. I believe that there is an area of choice in this context. I reject the argument that people are being denied choice because the firm does the choosing. On the other hand, they are getting a far greater choice.
Of course it is unfair to the next generation, however we try to put it. The right hon. Gentleman is a Socialist, and in Socialist terms he thinks that the Bill is right. Nevertheless, I think that we should be careful not to go beyond the limit where we must sign promissory notes for the next generation. Members of the next generation will have a difficult

and complex burden when they shoulder all the requirements that we seek to lay upon them. If we ask them to foot this bill they have a right to say to us: "You must build the right sort of society; you must build a strong society; you must build a society that is worth working for and paying for". This is fundamentally my main criticism of the Bill. It will not help us to build a society that will be worth working for and paying for.
The right hon. Gentleman brushed aside a new deal for women in the Bill. I was very sorry. I do not regard myself as a militant feminist, but I think that he is making me into one now. I want a new deal for women, but this is not the kind of new deal that I want.
Unfortunately, women are mainly working in the lower-paid occupations. The average wage for women is about £11 15s., half the average wage for men. The increased contribution that they will have to pay will be a very high proportion of their wage packets.
Women are not in a strong position when it comes to wage bargaining, as we have seen in the past. Nearly four million married women in work today are contracted out. Therefore, the tremendous increase from 8d. to the contribution that they will have to pay from 1972 onwards will be a great impost upon them. Even worse, about half of them are in part-time employment, and they will say, "Why should we work all the hours that make us liable to the contribution?"
Women work for a variety of reasons other than sheer financial necessity. Women want to work. It is socially important. We cannot do without them. We need more nurses, teachers, and women workers in the community. We want them in the play schools, in the nursery schools, and all the way through community service. The increased contribution will be a disincentive to a great many women. They will not bother to go out because they will not want to pay the extra contribution. However the right hon. Gentleman explains it, they will not think that they are getting a better deal.
At the moment woman can choose whether they are contracted in or contracted out. Women are not stupid.


They know, if they have husbands older than themselves, that in certain circumstances it is a good deal; but, on the whole, they do not think that it is. In any case, until we get a real new deal—and a new deal we must have; we must get rid of anomalies in taxation and in the law, and we must get rid of discrimination in the labour market as well as getting equal pay—we must not be told that we are to have the great privilege of not bothering to make up our minds in this complicated business whether we should be in or out.
It is all right for me. I have to be in. I cannot get a husband, so I do not have a choice. But for the married woman it is an insult. I accept that the National Council of Women does not oppose these proposals. It is anxious to get equal pay; it is anxious not to lose one card in the game. However, it is a great condemnation of this society if we feel that we must attack the problem in this way. We must not give up any of our rights and choices until we get the whole new deal that we need.
I tend to look at these proposals from the woman's view. My mother was a widow at 45. Therefore, I have always taken an interest in what happens to widows—particularly the difficulties and expense of bringing up children. One question I shall want to ask is: what about the woman whose husband has had a long illness? My father was ill for four years. I know how expensive and what a drain it can be on a family when the breadwinner has a protracted illness, ending in death. Under the Bill, the widow of such a man will be at a disadvantage because the allowances will be based on the last income tax year and on half the national average earnings.
I accept that these points can be brought out in Committee. But in welcoming what is being done for women, invalids, the disabled and all the rest, let us not forget the great complications we have to go into to make certain that all these difficult cases are met.
There are no average cases. This is why we cannot say that the average married woman or the average single woman will be better off. I do not know how many hon. Members came by under-

ground today. Hon. Members who did might have looked at the posters, as I always do, giving descriptions of the average man. What is the average woman? She is no doubt 35, 9 st. 10 lbs., has one blue eye and one brown eye, and 2·5 children. She goes out to work for a variety of reasons.
Many women go out because they want to give something to the community as a whole. This is the criterion against which we have to judge all our social legislation. We talk a lot about the values and qualities of life, improving the environment, and community involvement. If these are not to be worn platitudes, we must judge every enactment in this House against the practical results.
Will the Bill free more women to help in the community? Will it enable more active newly retired people to help in the community? Will it encourage more people to end their working lives sooner to make contributions to their communities? Are we having any regard to what people will want in the next 20 to 30 years?
Scientific and technological change means, I expect, that the structure of our society and the whole pattern of our life will change; but it will not mean that personal services will be in less demand. I believe that the future demand for personal services, supporting services, in the community will be greater than before. We must not say that the reward that comes from voluntary work can be shared only by those who can afford to do voluntary work. Nor must we say that the vocational enrichment which comes from doing a worth-while job must compensate someone for not getting real commercial value for his or her expertise. We cannot get nurses, teachers, doctors, priests and social workers on the cheap. We must pay the price for the job, and so we have to restructure many of these jobs. Many of these jobs will have to be done by trained auxiliaries, whether paid or unpaid. They will share the unspecialised work load, and we must make certain that opportunities are provided for people to do that work.
People may want to work hard for the first few years, retire on an adequate pension at 45, and then give their services to the community. Some may want an


interrupted career. It is in these instances, apart from the economic and financial considerations, that one finds the most valid arguments for occupational schemes; namely, that people will be enabled to make their real contribution to society as a whole.
We should throw the Bill out because it is irrelevant to what we are trying to do. It is irresponsible in the present context. Let us do the good things in the Bill. Let us get a new deal for women and incorporate it in better provisions for retirement. In the meantime, let us for heavens' sake follow my hon. Friend and make certain that we have a Bill which is relevant, and which will help us to strengthen our society as a whole.

7.41 p.m.

Mr. William Molloy: I do not intend to follow the hon. Lady the Member for Melton (Miss Pike) down the various paths along which she meandered. Like you, Mr. Speaker, I welcome the hon. Lady's return to the House, but I am sorry that she marked her return with a speech with Cassandra undertones. Her speech seemed more applicable to the nineteenth than the twentieth century, and the hon. Lady fell into the trap into which so many people fall. People tend to say that young people have too much money, but now the Opposition are saying that we are asking young people to make too large a contribution. I do not know whether this is a hypocritical argument, or whether people simply have not thought deeply about this Measure.
I believe that the Bill contains provisions comparable to those introduced under the Labour Government which embarked on the implementation of the Beveridge scheme in general, and the National Health Service in particular. As my right hon. Friend said there were in this House at the time, and professional people outside, particulrly experts, who threw up their hands in horror at the Government, after the most devastating war in history, embarking on a project like the National Health Service under which people could be attended to by a doctor for nothing, or could be patients in hospitals for nothing, and so on.
We have, today, the same Jeremiah cry about this Bill, and that encourages

me, because the people who are moaning and groaning about it are those who said the same things about the introduction of the National Health Service. The Tories voted against that Bill when it was introduced, but they were terrified to destroy it when they assumed power. They nibbled at it, but they did not improve it. They knew that they dare not destroy it, and the probability is that at some time within the next century the Tories will have to deal with this Measure. They will nibble at it, but they will not destroy it.
I believe that in the context of today the Bill is exemplary in the way that it proposes to care for people. It provides by law for young people to contribute not only for their own old age, but for the welfare of people who have now reached old age. What is required today is a degree of moral leadership, and that is precisely what the Bill provides.
Hon. Members on both sides of the House have concentrated today on the pensions aspect of this Measure. Let us not forget that it is much more than merely a pensions Bill. It covers almost every stage of social security. It deals with industrial injuries, unemployment, and so on, and what I believe will be welcomed more than anything else is the fact that when it becomes operative we shall do away with the silly system of printing stamps, printing cards, sticking stamps on the cards, defacing the stamps, and then burning the cards. This is the insane way in which we have been behaving, and one good feature of the Bill is that it will rationalise the social services.
The hon. Lady and one or two other hon. Members said that the Bill is extremely complicated. They appear to suggest that occupational pension schemes are simple and easy to operate, that big business can run them in a straightforward way. I wonder whether the hon. Lady would care to comment on the pensions scheme referred to by my hon. Friend the Minister of State on 4th December, 1969, which said:
The total retirement pension, including the part of your National Insurance pension described in section 15, is called your 'Gross Retirement Pension'. This will be expressed as a percentage of your Final Pensionable Pay and is calculated by adding together three items: (1) On the first £1,650 a year of Final


Pensionable Pay: 1½ per cent. for each year of Pensionable Service; (2) On Final Pensionable Pay in excess of £1,650 a year: 1½ per cent. for each year of Pensionable Service…
I do not know what that means, and I am sure that the hon. Lady does not, either. It is all very well for us from time to time to make debating points, but this is a serious issue, and I think that it would be wrong for anyone in the House to give the impression that private occupational and pension schemes are easy to understand and straightforward, and that it is only the wicked State which brings in the complicated ones.
There are some very good private pension and occupational schemes. The remarkable thing is that the better ones always seem to be concerned with some form of public service. I can understand the view taken by the National Association of Local Government Officers when the Bill was first presented. I do not blame it. It had recruited an enormous number of people because it had been able to negotiate a first-class superannuation scheme, the like of which did not exist in industry or in any other form of employment. The members of that organisation were rightly jealous of their scheme, but it was a wonderful exception. It was not the rule, and now the Bill intends to make it the rule.
We often hear people talking about the need to care for old people. I feel sure that the concern which the noble Lord the Member for Hertford (Lord Balniel) expresses for old people is genuine. He said that we were not doing enough for old people, and I agree with him. Perhaps I might, in parenthesis, ask him to have a word with his colleagues in the London Borough of Ealing, because they have just decided to implement a means test for old people who belong to luncheon clubs. If someone is in danger of getting a full, wicked, Socialist State pension, he cannot qualify for a buckshee lunch, or he may have to contribute something towards it. If the noble Lord has any influence, perhaps he will have a word with those concerned.
I do not accept this hackneyed cry from hon. Members opposite that we on this side of the House do not care for the old-age pensioners. That sort of remark is pretty thick, coming from the

other side of the House. I was very proud to be elected to this House in October, 1964, and I do not think that I am letting out any secrets when I say that I remember our first party meeting, when I thought that we would see the Prime Minister with his new Cabinet coming joyfully into the room telling us that they were all set for the future. But they did not seem to be particularly happy men. It was a serious moment for us when they told us that they had been looking into the drawers and the cupboards and had found a number of distasteful things, including a national debt of £800 million, and that all the things we thought we would do in our first 12 months of office would have to wait.
I remember the Prime Minister saying to us in this House that he would not let the burden of a Tory debt fall on the shoulders of the old people. One of the first things we did when we came to power was to give an increase to the old-age pensioners—the highest increase which this nation has ever known, and we have maintained it ever since. Indeed, only a few months ago a number of increases were given. Considerable benefits have been given, despite the cost of living, not only in actual pensions increases but in the form of rate rebates and other welfare services which have been inaugurated by this Government. They may not be sufficient, but they are vastly superior to anything that hon. Members opposite would dream of giving.
I hope that my right hon. Friend, in his discussions with all interested bodies concerned with occupational pension schemes, will not give in too much. We have heard a lot this evening about the good occupational pension schemes. Let me tell the House, including the hon. Lady the Member for Melton, that a former mayor of the Borough of Ealing was in one of these occupational pension schemes for 42 years and he now has the "magnificent" pension of 10s. 9d. per week. It is this sort of thing that we detest, and I hope that we shall carry hon. Members opposite with us. I know that there are some hon. Members opposite who will agree with me that there are a number of so-called occupational and private pension schemes which are an abomination and ought to be done away with.
I can understand that the Opposition, generally speaking, must put on a front and oppose the Bill, because they made a mistake when they opposed the National Health Service. They made a great error when they went into the Lobby against that Measure. They thought that the scheme could not be launched and that it was an impossibility. But they have learned their lesson. They know full well that this Bill is a possibility and that its objectives can be achieved. They know that when it has got under way people will say "Do you remember what you said in 1970? See what is happening now under the Act." By that time, of course, they will have changed their mind.
The Amendment is carefully worded. It wants a little bit from both sides of the argument. Hon. Members opposite are being driven more and more into accepting the principle of the Welfare State. I have heard from hon. Members opposite speeches on the social services which, if they had been heard by members of the old Tory party 80 years ago, would have branded them as extreme Left-wing Marxists. We have done a good job in educating the Tories. The trouble is that when we introduce a new Measure we do not do enough to inform the general public of what we are doing. We on this side of the House can take credit for the National Health Service. When the Bill setting up the Service was introduced there was grave apprehension amongst the general public about its feasibility and practicability, and the same thing is happening about this Bill.
My right hon. Friend and his colleagues in the Ministry, as well as the civil servants who have assisted them, have provided a Measure which hon. Members opposite have found difficult to attack in depth. I am proud that I belong to the Labour Party, because we have shown that we care for other people. There are hon. Members opposite with similar feelings, but they have to be dragged gradually towards accepting our beliefs.
I hope that my country will move up in the chart of nations who care. The Bill provides that the nation shall make every endeavour to care for people in distress and who suffer from sickness and injury, and to ensure that people will not lose their dignity because they have become old. This is the silver light

which has glowed throughout this Bill and I am very glad that we have been able to debate it today. I hope that when it is on the Statute Book it will have the support of all hon. Members so that this nation can take its proper place in the category of nations who care.
In the Bill we are enabling Britain to exhibit itself not only as a sane and decent nation, but as a nation which can return to that proud principle which we inaugurated in 1945. We are the nation who care. This may sound objectionable to some hon. Members opposite, although I hope that this is not so, because I believe that they, too, have changed. I do not think that we on this side of the House have changed except that we have become a little leisurely in our approach to the creation of a social democratic State. Hon. Members opposite have been compelled to move towards our thinking and behaviour. They should consider seriously the terms of their Amendment and some of the things which they have said in this debate. If they do so honestly, I do not think that they will vote against the Bill. When it becomes law I believe that Britain will once again have shown itself to be a nation which cares for its own people and will give an example to the rest of the world.

7.59 p.m.

Mr. John Pardoe: It is a great pleasure to follow the hon. Member for Ealing, North (Mr. Molloy). Listening to his peroration was like listening to the J. C. Bach Piano Concerto, when one keeps thinking that one is about to hear the National Anthem but is never sure until it begins.
As the Secretary of State has already made clear, my opposition to the Bill is primarily to its pensions provisions. He made it clear that the Liberal position on this is entirely different from that of the Conservative Party or the Labour Party, although, having heard the speech of the hon. Member for Hertford (Lord Balniel), I am glad to note that he has come into line to some extent at least. When we last discussed pensions—in a debate which should have been about abatement, but was not primarily concerned with that—I said that one day he would come to a sane decision on pensions and would frame a sensible policy which did not include his present graduated scheme. He still has to ditch


that, and I think he will, but he has come part of the way.
There are many good things in the Bill, of course—provision for widows and attendance allowances, for instance, are most welcome and they should be hurried along—but the proposals for pensions are totally misguided. They will do untold harm to our society; they are both economically and socially disastrous. I know that I am really the only person who will today put forward, with the backing of my party, an alternative scheme. Individual hon. Members on the back benches of the Conservative Party will, I think, support the kind of scheme which I have put forward on several occasions.
The alternative which I would like would be one in which we paid a flat-rate pension linked to average national earnings. I accept that we cannot continue as we are, that the present pensions are inadequate and that they will be even more inadequate in the future. Yet the great advantage which we have in this country is that this view is widely accepted. We do not have to convert people as for instance we have to do on family allowances, to the view that more money should be paid to old people. It is almost impossible to find anyone who disagrees, so the whole problem is how we organise more money going from this generation to the last generation, to the poorer old people.
In my view, the best way is to allow the individual to do this as far as possible. If we encourage him and give him incentives and cajole and persuade him, at the end of the day he will have done it himself, he will see that it is his decision and he is far less likely to resent this redistribution, which I and most hon. Members welcome.
So to the alternative, which is not thrown up just for the sake of an alternative. The Liberal Party has been advocating it since 1963. It is this increased flat-rate pension linked to average national earnings and paid for by a payroll tax. I agree with what was said about sticking stamps on paper, but why replace the thing with a computer? There is no point in that. If we are here in 1992, we will spend our time explaining to constituents how the computer works.

This will be an absolute nightmare. My constituents might accept the computer if it were in Launceston, but, as it will be in Newcastle or somewhere like that, they will not.
We should set targets for the total contribution for each individual's pension. We should say that the State will not tolerate a pension of less than two-thirds of previous earnings, and that it will be met in two parts. One will be the basicflat-rate pension paid by the State and the other will be privately provided through occupational schemes or by other means. I accept that there will inevitably be large numbers, even when one has created incentives for occupational schemes, who are not covered by those schemes, and they should be allowed to put a percentage of their income into a 1956 Act retirement annuity. They can do that with an insurance company or a friendly society and their contributions should be matched by a contribution from a central fund, raised by means of a levy on those employers who do not provide their own occupational schemes.
The Government have never seriously answered this proposal, so I can only guess at the objections. The first is that employers would not be prepared to meet the full cost of these rather high pensions—half the average national wage eventually as a basic pension—through a payroll tax. But the proposal is that the employer should pay two-thirds of the tax and the employee one-third, which is about the apportionment under the present scheme. So the employer will not be asked to pay the whole thing.
Moreover, even if we had an immediate increase in pensions, let us say by 1972, when this scheme starts, of 25 per cent.—that would be £1 0s. 6d. for a married couple and 12s. 6d. for a single man, which would bring a pension up to £5 12s. 6d. for a single man and £9 2s. 6d. for a married couple—it would not cost the Government any more in 1972 than their present scheme will cost. The existing pensioners in 1972—about whom I am much more concerned than the people who will have very high wages to provide for themselves in future—would have these very substantial pensions. They may not be as substantial as we would like—they would not amount to half the average national wage—but, over a period, we can reach that target


without too great a difficulty. The transitional period, of course, will depend on the rate of economic growth. I want to move to a pension for a married couple of half the average national earnings.
May we have a comment from the Government about the 18 per cent. Treasury contribution? When the national insurance scheme came in, this figure was up in the 20s., but it has come down to 18 per cent. This does not seem to be a magic figure and bears no relation to the costs of redistribution within the present scheme; I wonder whether the Government can give us some rationale for it. It amounts to between £400 and £500 million a year. If we abolished the Treasury contribution we might be able to put that towards getting rid of S.E.T. If we have a redistributory principle for contributions within the Government scheme, is there any need for a Treasury contribution? Presumably, the original purpose of that contribution was to help to pay for redistribution.
The second major criticism of a flat-rate scheme is that it brings about—the right hon. Member for Sowerby (Mr. Houghton) said this in a previous debate—an intolerable redistribution of income between the rich and the poor. His objection to a fiat-rate scheme paid for by earnings-related contributions was that it would be redistributive. I regard that as nonsense. The Government scheme is redistributive, and rightly so.
A single man earning £33 a week will get a pension of 36 per cent. of his average earnings and a single man earning £11 a week will get a pension of 60 per cent. of his average earnings. If we talk about a flat-rate pension of, say, £7 10s., instead of the present £5 for a single man, a man earning £33 would get a pension of 23 per cent. of his average earnings and a man earning £11 would get 68 per cent.
So what we are asking a man on, say, £33 a week to do, if we opt for the flat-rate scheme with earnings-related contributions, is to accept a pension of 23 per cent. of his earnings over his life instead of 36 per cent., so that existing pensioners can get a substantial increase now. I very much doubt whether a large majority of people would oppose that kind of redistribution. We already have people converted to our view of the importance of provision for old people. That would

be an acceptable degree of redistribution. It is certainly one that I would support.
So the Government are running away from the political difficulties of that degree of redistribution. I do not think that those difficulties exist, and, therefore, the alternative stands of a flat-rate scheme paid for by earnings-related contributions. In the long run it is certainly no more expensive. It is far simpler, and would produce a greater degree of social justice than the Government's scheme.

Mr. Molloy: When the hon. Gentleman says "flat-rate pension", do I understand that irrespective of what people are earning they would all receive the same pension at the end of the day?

Mr. Pardoe: They would get the same pension from the State, but would top it up from an occupational scheme. The pension from the State would be related to average national earnings.
I should like to ask the Minister something about the problem of the married woman who stays at home. I am aware of what happens to the married woman going out to work. That is clear from the Bill and the explanatory pamphlet. But what about the woman who stays at home for 15 years of her earning career to look after the children? She does not obtain an income, though perhaps she should. Perhaps society should value looking after children very highly. Some of us might even believe that it was worth more than working in a factory, even perhaps than teaching. What will happen about those 15 years when her earnings are averaged? Is there any way in which she can have a theoretical income written into those years to upgrade the average over the whole period of her working life?
But the most important objection to the Government's scheme is philosophical. It takes away from the individual decisions which can and should be left to him. In modern society it is inevitable that the individual cannot do everything for himself, or make every decision for himself. There is a greater degree of interdependence in a complex society than in a simple society. He cannot, for instance, decide to devalue his own £. He cannot decide to enter his own Common Market. He cannot even decide to build where he likes. For one reason and another the power of decision


has been taken away from him, and will inevitably be taken away from him even more. So his freedom of choice is diminished, and it is all the more important that we should preserve those areas in which he can make his own choice, and extend them where possible.
The Bill will mean that millions of decisions now taken by individuals in their own homes will be taken by a Government computer. I regard the purpose of affluence and prosperity as being that the individual should be free, particularly from financial constraints, free to make those choices and decisions that in previous ages were the privilege of the very few. Yet as affluence and prosperity advance in modern society no such process is taking place.
One can think of a thousand ways to illustrate this. One thinks particularly of education. About 200 years ago a few people took important family decisions about the education of their children, while the rest received no education at all. Nowadays we have universal education, and very few more people make decisions about where their children will be educated. The decisions are largely made for them. It is not only in education that this is so.
In pensions we should build a partnership between the State and private provision, with the State laying down an off-the-peg, universal, basic minimum and private insurance undertaking the job of bespoke, tailor-made pensions.

Mr. Crossman: Is the hon. Gentleman's case that a private pension scheme, which usually imposes the contributions as a condition of service, gives more choice to the individual than a State pension scheme?

Mr. Pardoe: It gives him vastly more choice. First, he can argue about it through his union or association. He can decide whether to take the job concerned. Very often he can decide whether he will work for a certain firm within a particular industry. There is a whole host of choices that he can make in that situation that he cannot make if the Bill goes through.
Human personality thrives on choice. By the Bill that choice will be diminished and human personality circumscribed. It is fundamentally wrong. I also believe

that it is politically misguided and will be a social disaster of the first magnitude.
Finally, I would like to say something about what the noble Lord the hon. Member for Hertford said this afternoon. He has nearly come round to our way of thinking, or anyway to what I have been pressing him to do. He offered a rather ingenious explanation, though I was not convinced, of why he still clung to his graduated pension scheme, which I regard as nonsense. He said something to the effect that he wanted to leave the rest, but not exclusively—and he turned and emphasised the point in my direction, I thought—to occupational schemes. Why not exclusively? I do not understand the extraordinary attraction the Tory Party feels for this very small bit of earnings-related pensioneering. Why cannot it loose itself from the grip of Kingston-upon-Thames?
What about the existing pensioners? The noble Lord was very critical of the Government, and the Opposition's Amendment is very critical of their failure to deal with existing pensioners. But what are the Conservative Party's standards? Will they relate existing pensions to the average national wage? If so, at what level?
Will the Conservative Party repeal the Bill should it become law by the time they come to power, if they come to power? It may be that the Bill will not be law, but if they come to power, and find that it is, will they throw it out? They owe it not only to the House but to a large number of people who will be involved in dealing with the matter over the next months and years to tell us, because a great deal of work will be done, and many people would find it easier if they knew exactly what the likely alternative Government will do with the Bill.

Lord Balniel: In answering the hon. Gentleman, may I congratulate him on his very interesting contribution to the debate?
I thought that I had made it clear that we will implement that part of the Bill which improves provision for young widows, the sick and disabled and introduces the attendance allowance for the severely disabled. But our proposals for improving the pension arrangements are so different from what the Government


propose that we will repeal that part of the Bill.

Mr. Pardoe: I am grateful to the noble Lord for that intervention. It has said rather more about the Opposition's attitude than he said in his speech. I think that it means that he could do away with the Amendment and vote against the Bill in its entirety.

8.18 p.m.

Mr. Leo Abse: I am not surprised that my right hon. Friend the Secretary of State complained that the debates so far on these pensions issues have been so narrow. I am not surprised because, having heard today's debate and read the others, I find it abundantly clear that if there is to be a genuine dialogue about any blemishes within the existing pension scheme it must be a dialogue between the Secretary of State and the Front Bench and our back benches.
My right hon. Friend does not underestimate the importance of the Bill. He is right to describe it as revolutionary, and one which obviously takes its place amongst our major legislation between 1945 and 1950.
It is nearly six years since I participated in an insurance debate. I do not claim any special expertise. When I took part in 1964, the debate was dominated by the publication by Margaret Wynn of her book on fatherless families. I find it extraordinarily curious, in view of the challenges that work then aroused, that issues which were then so keenly debated should, as I see it, be so strangely smothered in these proposals. If some of the main lessons to be drawn from her work had been learnt, I should not find myself now compelled to say that, essentially, no doubt unconsciously and unwittingly, these proposals, so splendid in many respects, nevertheless work out in a way that, in my judgment, is anti-familial, involving as they do a serious transfer of resources from parent to non-parent and precipitating, as I think they do, compulsory over-insurance for old age at the expense of families with dependent children.
Whatever the weaknesses of the Beveridge plan 25 years ago, as the right hon. Gentleman has adumbrated, and which were referred to by my right hon. Friend, the fact is that it did attempt to

take a balanced view of all classes of the community. Expressly, it stated:
Better distribution of purchasing power is required among wage-earners themselves, as between times of earning and not earning, and between times of heavy family responsibilities and of light or no family responsibilities.
As will be seen from that quotation and, in my view, the whole tenor of the plan's recommendations, Beveridge spoke for the provision for children. That was central to the recommendations. In these proposals, it is old age that is central to the proposals. This may delight perhaps the gerontologist and the geriatrician, but is bound to cause anxiety to the pediatrician and the family man.
Let us take the single pensioner. One will find that he receives, if he was a man earning the average national earnings, some 42½ per cent. of life earnings, up-rated, I understand, for the effect of inflation, changes in earnings levels generally and so on. I have to ask myself whether 42½ per cent. is a reasonable pension for a single man with no dependants.
Let us suppose that the single pensioner who earns this pension once had a wife and three children to support. Would his standard of living be higher or lower as a pensioner than it was as a family man? The answer is clear—that his standard of living as a single pensioner would be substantially higher than it was when he had a wife and three children to support. It would in particular be very much higher than during those years when his children were older and especially, as those of us who have them know, than when his children were adolescent. So a pensioner will find himself in the position that he is much better off than when he was a family man, because, although a pensioner may have to pay extra in fuel, his deterioration in health is provided for already by the National Health Service and he does not need to spend as much on clothing or on food as in middle age, when he went to work every day. As a pensioner, he will not, indeed, need or wish to spend as much on clothing as his wife or a single one of his adolescent children once cost him. The average citizen, as he grows older, spends less on food and clothing even while still working and well able to afford a higher expenditure.
Let us take the position a little further. One finds that a poorer man whose average life earnings are only half the national average receives 60 per cent. of his wage. Did such a man once spend 60 per cent. of his wages on himself and only 40 per cent. on his wife and three children? There are no grounds for such an assumption. It must be remembered that about two-thirds of all the nation's children at any one time are in families with two or more children and 40 per cent. in families of three or more. One of the consequences of the fundamental changes proposed in the Bill is that they would guarantee a standard of living to single pensioners substantially higher than when they were fathers and mothers of dependent children, and would guarantee a standard of living for the pensioner which is substantially higher than that enjoyed by the majority of families bringing up most of the nation's children at the same point of time.
I would make no complaint about these high pensions if, demonstrably, they were not being gained at the expense of family units. I have made a comparison between a family and a single pensioner. Let us take a married couple where the wife has no earnings record and the pension will be 55 per cent. of the man's wage if his life earnings have been at the average national level. At this level, therefore, the pension for a married couple is 1·3 times that of a single pension and, as Margaret Wynn put to me, one man is equated with 3·4 dependent wives. The standard of living of the elderly couple will be substantially lower than that of the single pensioner, but nevertheless still substantially higher than that of the family with three children and higher than the pensioner couple enjoyed when they were the father and mother of the dependent children.
Let us go on a little further. Let us suppose that the wife as well as the husband has an earnings record. The pension should be higher still. The extent to which the wife works, as I understand it, will depend very much on the number of children, because, obviously, the mothers who spend much of their lives rearing their families will receive lower pensions than those wives who escape their family responsibilities in one way

or another. The more years she spends in rearing the family, the lower the pension for the average woman. The larger the family, the less the mother is able to work outside her home.
These proposals may delight the celibate and those who think that large families should be dubbed as social delinquents. But those who are aware of the expanding world literature and discussion on the dependence of economic growth upon investment in children, both by education services and by parents, may regard this as a curious moment, however unwittingly and unconsciously it has been done, to weaken in Britain the economic structure of the family. It is all very well to over-insure old age but one has to ask who will pay for these proposals.
I would not mind if the burden were really falling upon the very wealthy but the fact is that the working people will have to pay, except the very poorest who are earning less than £5 5s. a week. The majority of the nation's families with dependent children will have to pay and will be the poorer if the proposals are implemented in the present form, because the proposals are bound to mean transferring substantial resources, many millions of pounds, from households with dependent children to households and, more particularly, pensioners without dependent children. I am bound to be unhappy about such a situation.
There are 1½ million to 2 million mothers with dependent children who go to work. They now contribute but little to National Insurance. These proposals will remove the right of mothers to opt out in this way. With a wage of £8 a week a working mother will have to contribute an additional 10s. 3d. Since it is well known that most of the money received by way of sickness benefit and unemployment benefit will be received by older workers without dependent children, the 1½ million to 2 million mothers with dependent children will be giving money which will go to the benefit of those who have no children at all, or those whose children have grown up.
All the blemishes in these proposals stem from the failure to have a Government family policy. That is why the widowed mothers' children allowances are cruelly not age-related. That is why,


as Richard Sleight pointed out in Saturday's Guardian, the invalid's pension leaves the young man with a wife and young children to support with less than will be obtained by an older man with the same incapacity and less responsibility. That is why, although we have 94,000 motherless families and so many in danger of being taken into care, we are now treating mothers as single women and making them pay identical contributions as single women but failing to follow the United States practice of the mother's payment being an insurance on her own life for the benefit of her children.
At a time when it is fashionable to talk of population policy and when abortions are deemed to be socially desirable, it may not be vogueish, despite the need, to demand a Government family policy. But the flaws in this nobly intended pension scheme indicate how dangerous is much of our legislation if it fails to be informed by a sensitive awareness of the family cycle.
There are two paragraphs within the White Paper which refer to the position of divorced women and one-parent families and tell of a committee set up to review their position. I hope the Secretary of State, if he hears me on nothing else, will bear with me on this. There are other legislative changes about which in his preoccupations he may be unaware, but they are legislative changes which I am sure the Law Commission would tell him are likely to have an adverse effect on unmarried mothers. Will he tell us what are to be the terms of reference of the committee which he is setting up on this issue? I hope that he will give sufficient freedom to that committee to take into account something a little wider than the narrower pension and benefit issues raised by this Bill. If we do not do that we are in danger, again unwittingly, of creating great difficulties for the one-parent families, the unmarried mother and divorced women.
This is particularly important when this scheme could have the result that many of these women who have children and no available father find themselves, as a result of the increased payment under the new scheme, in a position where they will be not be attracted to join the main stream of working women and find it

necessary, so marginal are their means, to fall back on supplementary payments. Therefore, I hope that the Secretary of State will give attention to this point.
I hope that my constituents will not regard my criticism of the scheme as in any way detracting from the fact that it is a major step forward by a Government concerned in occupying themselves with the problems of old age. It is a choice between what the Secretary of State rightly called insurance interests, which are not concerned with half the population, or the real needs of old age, and the State. I hope that my constituents will understand that and will know that my only desire is to draw attention to blemishes on a great and fundamentally revolutionary scheme.

8.36 p.m.

Mr. John Nott: I confess that I did not entirely follow all the detailed points made by the hon. Member for Pontypool (Mr. Abse). I would only say in my defence that I have a feeling that the Minister did not entirely understand them either. Nevertheless, they were valuable contributions which I hope will be discussed further in Committee.
The Bill starts from the premise that full and adequate income-related benefits for old age, widowhood, sickness and unemployment should be provided by the State. From a Socialist viewpoint, I suppose that this is an unarguable proposition, even though there is plenty of evidence to indicate that it does not accord with the wishes of the majority of the British people who, if given the opportunity, would much rather provide this protection for themselves. Nevertheless, given that there are still a few Socialists, like the Minister, who think like Socialists, it is a political prejudice on their part worthy of recognition by this side of the House and perhaps even worthy of respect. The only important question which I should like to pose is whether this Socialist prejudice, with its utopian visions of a new Beveridge—all-embracing, comprehensive and uniform—is workable, necessary or desirable.
I must briefly interpose my own prejudices which may appear to some hon. Members opposite as being detestably Right wing. The idea of a benevolent State nobly dispensing in 1992 universal


health and pensions for all the people strikes me as very old fashioned because it is expensive, inefficient and not really what people want. I do not conceive that there is anything very ennobling about receiving a pension from the State if I am able to provide it for myself. Although I am perfectly happy to bear, through the redistributive nature of taxation, my share in providing pensions for the poorer sections of the community, I see very little reason why I should have a compulsory levy put upon me—because we are talking of partial contracting out—by which I provide for the pension of someone who is equally as well endowed as myself and who may not wish to save the same proportion of his income as myself.
For me, the concept of full income-related State pension benefits seems to involve an infinitely paternalistic and rather pessimistic view of the British people which indicates that all need the crutches of the social services. This is the quickest way of turning the British people into incurable cripples so that they lose the will to stand on their own feet and provide pensions for themselves. I therefore entirely agree with my hon. Friend the Member for Hertford (Lord Balniel) and the hon. Member for Wellingborough (Mr. Fry), who made an excellent maiden speech, that there is still enormous scope in this country for the encouragement of genuine savings through private schemes.
However, my task is to argue, not the philosophy of the Bill, because agreement between the two sides of the House is not possible on that, but the merits of the Bill considered on the Minister's own terms. When I read it and study it, I have the gravest doubts about the sums and I should like briefly to go into the arithmetic of the Bill. It seems to me that the concept of a partnership with the private sector is a pure delusion, because one cannot be in true partnership with one's competitor. The fact that the Minister has broken off his discussions with the private pension interests is only evidence of the fact that, to a large extent, they are competing with him in the pension field.
A State scheme of these ambitious proportions—it is of ambitious proportions,

and I do not niggle at that, looked at from the Minister's side—cannot be viable alongside a continued rigorous growth of occupational schemes, which are a major source of the nation's savings and investment. Even following the increase to 7 per cent. in the employer's contributions and assuming current levels of contracting out, it is my view that higher contributions will be required before the scheme has gone too far, if only because of the inflationary spiral arguments that were made so lucidly by my hon. Friend the Member for Wellingborough; and even that is after what I would describe as rather suspect calculations of equivalent commercial cost.
If one looks at an average quotation in the insurance market today, one finds that a single premium of 2·6 per cent.—the sum of the 1·3 per cent. of the employer and the 1·3 per cent. of the employee contained in the Bill—would provide £1 per annum at 65 to a man aged 43 today. It seems to me to be very dubious whether the average age of the employed pensionable population is 43. If it is not 43 and it happens to be 46, all the Minister's calculations are wrong.
Secondly, I believe that the interest charges which the Minister has taken, at 7½ per cent. and 5½ per cent., are too high and, thirdly, that the expenses appear to be low, at least when compared with the smaller funds. Therefore, although I would not claim that the books are cooked, the whole calculation of the abatement provisions contains assumptions which are of questionable validity.
My belief, therefore, is that the Minister has got to hold to the 1·3 per cent. abatement, and I will shortly explain why. But if he does hold to the 1·3 per cent. abatement, two consequences will follow. First, employers will do their utmost to lower the age of their pensionable employees, to the detriment of elderly and middle aged people in their employment. The Minister recognises this, and this is why the Bill bristles with anti-selection measures. Secondly, the right hon. Gentleman will force insurance brokers into much more risky markets for life insurance and this will lead to a general decline in the quality of pension fund management in the private market.
On the present plans, I do not see how the Minister—who is not listening to a


word that I am saying, but I am quite used to that with this particular Minister—can accede to the demand for the 1·5 per cent. abatement which is being made by the private funds without making an even greater nonsense of his present pension scheme, because I believe that the State scheme is probably unviable already, if the Secretary of State goes much further and agrees to 1·5 per cent., the whole edifice could come crashing down around him, requiring either higher contributions or a greater Exchequer subsidy before we start. That being the case, I now come to the detail of what I want to say. The right hon. Gentleman's only alternative is to alter the parameters, which I state as being threefold. They consist of the range of half to one-and-ahalf times the national average wage. The second parameter is the formula of 60 per cent. and 25 per cent. and the third is the 20-year maturity. Those are the things that can be played about with in the Bill as it stands.
If the Secretary of State wants to play around with those parameters and change the range from half national average earnings to national average earnings, and change the formula to 80 per cent. and 10 per cent. from the present 60 and 25, he could still have a viable State scheme and provide proper contracting out arrangements. I personally think he should do this, because if he did so he would then be providing—it seems to me to be the main criticism of the Bill that it does not so provide—pensions for those in need, and leave those who are not in need, leave those who are above the national average wage, to top up their benefits in the private sector. This is, I am sure, what my right hon. Friend was meaning when he talked about the desirability of topping up in the private sector for those who are not in need.
Now I come very briefly, for I am not going on much longer, to what I regard as the worst side of this Bill. The Government have got to raise more cash from somewhere to promise the higher pensions, and they cannot or will not raise this money by taxes, so they resort to the more respectable device of calling it a contribution. This is a well-known political device, to which my own party resorts as well. I think that one day politicians have got to come clean and say that we admit that an unfunded pay-as-you-go

scheme is not a contribution at all. Of course, we do it this way because we know that it is easier than putting on a tax, so called; but it is a tax.
What is new in this scheme is to guarantee to private contributors a pension, calculated according to the scheme's provisions, when the pensioner retires; but this is a guarantee which the Minister cannot possibly give, and it is quite wrong for the Government to claim that it can do so. I agree entirely with the criticisms made by the right hon. Gentleman the Member for Sowerby (Mr. Houghton) when he talked of a promissory note which will aggravate the conflict between the generations, and which may not, indeed, ever be honoured.
I ask quickly three brief questions. First of all on the taxation arrangements. I believe that discussions with the Inland Revenue relating to the tax arrangements in the private sector have just begun. Are we to know in Committee the results of those discussions? If not, how can we discuss the relationship of the State to private schemes, unless those private discussions with the Inland Revenue have been completed?
Secondly, are we to know in Committee what all these multifarious regulations will say? I cannot anticipate that the regulations will be published, but unless we have some idea of what they will involve, we cannot come to proper decisions on a number of vital items in the Bill.
Lastly, will the Minister tell us—because he has encouraged us to table an Amendment on transferability, an Amendment which I would welcome—what really did happen in his discussions with the private pension interests? I hope he will tell us in Committee, because my information is—and it may not be accurate—that the Minister shirked it in the end because the unions wanted to retain the right on the part of their members to obtain their cash contributions on withdrawal from a scheme. Was the Minister saying there were some pension funds which did not like the idea because so many funds make major profits, as we all know, from withdrawals each year? But he is the Secretary of State who has to make the decisions upon legislation. Some Government has got to do this. Has he shirked the issue?

Mr. Crossman: The chief opponent was the C.B.I., the Confederation of British Industry, which took the view most strongly that this would mean a retrospective burden, and it put this to me. It was not the National Association of Pension Funds mainly, but the C.B.I.

Mr. Nott: I am grateful to the right hon. Gentleman for clarifying the issue. I do not think the Government have been notable, during their four or five years in office, for doing what the C.B.I. required. If the Minister is really saying that it was because the C.B.I. objected, it is one of the weakest arguments I have ever heard. I simply do not believe it was the true reason, nor will anyone else believe it either.
I conclude by saying that we have a scheme which must be incomprehensible to the vast majority of the British people. No one will be able to understand his own pension entitlement; no one will believe the computer. As the hon. Member for Cornwall, North (Mr. Pardoe) said, how shall we explain to our constituents in 1992, if we are still here, which I doubt, that the computer is right? It simply is not "on".
Secondly, the Bill does virtually nothing for the 7 million present pensioners and those who will retire in the next few years. The only point I would make to the hon. Member for Cornwall, North about flat-rate of earnings-related benefits is that it does not make much difference to pensioners who retire in the next 10 years, in practical terms, but I take the hon. Gentleman's point. I think marginally I would prefer flat-rate benefits.
Thirdly, the Bill contains a guarantee for pension benefits which the Minister is in no position to give. He cannot know that it will be honoured by his successors and by future Governments. Moreover, it is wrong to decide now that the next generation of workers and employers should be committed to paying our generation bigger pensions out of their incomes.
Fourthly, it will bear hardly on those who have already made provision for themselves in occupational schemes, and I will give one flagrant example. The Minister has been prevailed upon to give inflation-proofing to those who are still in the Boyd-Carpenter scheme. This is quite wrong. It is retrospective legisla-

tion. When employers came to make a decision on whether or not to contract out of the Boyd-Carpenter scheme, they based that decision upon the then existing facts. Now the Minister has said that he is giving the Boyd-Carpenter pensions inflation-proofing. Although this enables the Minister to pose as a benevolent and charitably minded man, this is retrospective legislation of the wrong type.
I think the Bill is misguided and damaging. I hope the British people will understand it. If they do, I have no doubt that they would prefer to provide pensions for themselves through their employment. Have an important State scheme, yes, but let people who prefer it top up their pensions with private provision rather than force them to rely upon a benevolent and all-embracing State to perform this function for them.

8.52 p.m.

Mr. Jack Ashley: I hope that the hon. Member for St. Ives (Mr. Nott) will forgive me if I do not answer the points he has made, but I am most anxious to make a specific point or two of my own.
I want to register some reservations on one or two proposals, but before doing so may I say that I regard the Bill as one of the greatest reforms of social security that this House has ever seen. I believe it is an historic Measure, and that the Government have every right to be proud of it.
I have listened to some criticisms here today and I have heard some outside. I respect constructive criticism, but the spectacle of Sir Paul Chambers donning the cloak of St. George and galloping forward in defence of impoverished old-age pensioners is bound to raise a few cynical eyebrows. The sooner he gets down from his high horse and drops his strident language, the better the debate inside and outside the House.
The primary objective of the Bill is to ensure that poverty is reduced for superannuated pensioners. It is a noble objective, which I have no shadow of doubt the Bill will achieve. Another aim is to provide for the needs of the long-term sick and disabled, and I am astonished that so few people have dealt with this important subject today. I believe that this objective is less likely to be achieved by the Bill.
The provisions for the disabled are a major step forward, as they recognise disablement as a special category for which provision should be made. But I have some reservations, for example, about the invalidity pension. There is, first, no help for the disabled housewife and the congenitally disabled. I realise that the scheme is based on the contributory principle, but this should not prevent the Government from introducing into the scheme an element of flexibility, as they have done with the constant attendance allowance.
I appreciate that this is not an easy matter to resolve and I am not asking that all housewives in this position should be given a disability pension overnight. However, I hope that the Government will reconsider the categories in the Bill and try to extend the provisions in the way I have described.
My second objection stems from my fear that the scheme will discriminate against those who have been disabled the longest; in other words, that the man who is disabled early in his working life will receive the least benefit. This would be a highly undesirable state of affairs. While I appreciate that it is based partly on the contributory principle, we should not forget that the young disabled man probably has family responsibilities, and I therefore hope that the Bill will be improved in this connection, too.
The Bill takes account of disabled persons' contributions, and I have no quarrel with that. However, it requires a new provision to take account of disabled people's needs; for example, the additional expediture which they must incur for, say, clothing, laundry, diet, transport and heating. The disabled who are immobilised certainly do not have the ability to generate the hot air that is frequently generated in this Chamber, particularly by hon. Gentlemen opposite.
I extend a warm welcome to the constant attendance allowance, which I regard as a major step forward. A powerful economic case can be made out for such an allowance and, knowing the attitude of the Government, I am sure that they considered not only that economic case but also the social and humanitarian case that can also be made out.
While I warmly welcome the constant attendance allowance, I trust that I will

not be considered churlish in saying that I regard the present proposal as only a beginning, for £4 is inadequate for this purpose. Anybody who requires frequent attention throughout the day, and prolonged or repeated attention during the night, must present the person providing that attention with a considerable task; and £4 a week is not nearly sufficient. I trust that, in due course, the Government will reconsider this provision.
A reservation which I have about the constant attendance allowance concerns the earnings qualification of £325. That, of course, will exclude the very low-wage earner, who is usually the disabled, and also those who are completely unable to work. Provision is to be made for the constant attendance allowance to be paid by the Supplementary Benefits Commission. While I do not wish to detract from the activities of the Commission, which is doing a magnificent job, I suggest that the Government should not always leave the question of allowances for the disabled in the hands of a means test body, so to speak.
The constant attendance allowance is not to be paid until 1972. I am not impressed with the argument that all pensions should be paid immediately. I appreciate that that cannot be done and that I would be out of order to argue for a payment to be made now, but since the chronically disabled are urgently in need of a constant attendance allowance I trust that the Government will consider making a grant in respect of this allowance immediately.
The late Megan du Boisson and her colleagues in the Disablement Income Group campaigned for a long time for the constant attendance allowance, along with other claims. The Government have shown an awareness of the problems of the disabled and a willingness to take practical steps towards solving them. I believe that they should be congratulated. A constant attendance allowance and an invalidity pension mark the beginning of what I hope will be a legislative programme designed to free from penury and enhance the status of our sick and disabled.

9.0 p.m.

Mr. Paul Dean: I want, first, to join in the congratulations to my hon. Friend the Member for Wellingborough (Mr. Fry) on his maiden


speech. Whatever the House may have felt about what he said, I am sure that hon. Members recognised the knowledge, realism and humanity that he showed in his speech. It is a great pleasure to welcome him to our pensions debates, and we look forward to hearing him on this and other subjects many times in the future.
We are also very glad to see the Secretary of State restored to health and here to introduce this Bill in person. In his speech, I thought that I detected a little nostalgia for 1957 and the first pamphlet that the Labour Party produced in those days. One of the troubles about the Bill is that it bears the stamp of 12 years ago and, to some extent, Labour thinking has stuck there. In many respects, times have changed a great deal since then. The Bill has been almost too long in gestation. It is old before it is born.
Enormous changes have taken place since that first pamphlet was produced, which the right hon. Gentleman himself said a few years later was far too complicated. We have seen a growth in occupational pension schemes. At that time, under 8 million people were covered. Now the total is over 12 million. At that time, the cost of the State scheme was modest compared with the present day. Over that period, the cost has trebled. In addition, there is the growing desire and ability on the part of people to provide for themselves and exercise their own choice over and above the arrangements made by the State. Finally, and perhaps most important, there is a growing disillusion in the country with policies which increase taxation, which increase Government expenditure and interference in the lives of individual men and women. This Bill will do all those things.
One point which has been mentioned many times in the debate, and which was dealt with by the right hon. Gentleman, is the position of existing pensions. I notice that right hon. and hon. Gentlemen opposite are very sensitive about this one. It is one of the fundamental errors and weaknesses in the whole scheme that it excludes over 7 million existing pensioners permanently and irrevocably from its benefits. It creates two nations in old age, with those who retire before 1972 and those who retire after, with a rigid and arbitrary line drawn at that date.
I know that the Bill provides for a two-year review of pensions and a guarantee that those pensions will be price-protected. But, as the right hon. Gentleman said, we know that, since the war, Governments have done better than price-protect the pension. The right hon. Gentleman is writing into the Bill a provision which is more modest and less ambitious than we have been able to achieve up to now. He says that, as a minimum, the finances of the scheme allow only for price protection. If he intends to do more than that, surely it will mean that contributions have to go up more speedily than would otherwise be the case.

Mr. Crossman: It is all in the White Paper. The finances of the scheme assume not only price protection, but wage relation. It is estimated on the assumption that the amounts will rise as fast as average wages. But we have given only a minimum, with the assumption that, over a period of time, it will, in fact, achieve wage relation.

Mr. Dean: What the right hon. Gentleman is doing is making the point that I have just made. He is drawing a distinction between past pensions and future pensions, between past service and future service. As I understand, he is confirming the criticisms which I have just made.
In any event, there will be a feeling of injustice and unfairness on the part of the people who have already retired—the same sort of situation that we have with the over-80s today. People who retire after 1972 will be better off than those who retired before. We shall have the odd situation, as this scheme matures, that the younger pensioner will be receiving a bigger pension than the older pensioner. Surely, in a basic State scheme, it should be exactly the other way round because needs tend to increase with age.
The point has also been made by hon. Members on either side of the House—including the right hon. Member for Sowerby (Mr. Houghton)—that our children will have to pay bigger contributions than we are prepared to pay today for the pensions of our fathers and grandfathers. As my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) put it, we are bidding for the generosity of the next generation.
In our view, these are fundamental weaknesses in the Bill. We say, in contrast, as my noble Friend the Member for Hertford (Lord Balniel) said, that we should start with existing commitments and that the first charge on the scheme should be existing pensioners and others who are in receipt of benefit. That means that the essence of the policy that we put forward is to raise enough money to meet existing commitments and to provide further improvements without damaging the future of occupational pension schemes and similar arrangements.
This means that we do not think it right to create an arbitrary division between those who retire before 1972 and those who retire after. That clearly means that we should build on the existing pension arrangements.

Miss Margaret Herbison: Would the hon. Gentleman tell the House exactly how he would finance the increased pensions that he wishes to give to the existing pensioners?

Mr. Dean: I am coming to that, but there are one or two specific points I should like to mention first.
My noble Friend said that we were committed to providing a pension for the over-80s, something which is totally absent from this scheme. We feel that there is much to be said for a higher level of pension for older pensioners than for younger pensioners because needs tend to increase with age. In our view, there is also much to be said for improving the increments. I think that it was the right hon. Member for Battersea, North (Mr. Jay) who, in the debate on 4th December last year, made a powerful case for this. Here is one way in which one can not only encourage those who want to go on working after minimum pension age to do so, but it is one of the quickest ways in which one can encourage and help them to earn a higher pension. The terms offered in Clause 21 are not, in our view, good enough to encourage that process.
We have given a general welcome to the other proposals in the Bill, particularly those concerning widows and the disabled. We also welcome the constant attendance allowance as a very welcome start and it is supported on both sides

of the House. We shall want to probe in Committee whether it is the right start and whether the right people have been chosen, bearing in mind that the Government estimate that 50,000 will benefit in the first place at a cost of about £10 million.
Clause 15 deals with unemployment benefit for those involved in strikes. It was mentioned by the hon. Member for Rowley Regis and Tipton (Mr. Peter Archer). It involves a major change and many industrialists feel that it will remove the disincentive to strike action which the present arrangement provides. We shall clearly want to examine it carefully in Committee.
To summarise on this, the Government talk and think big about 1992, but they do not concentrate on the priorities of today and in our view these are the priorities which should have first place.
The right hon. Lady asked how our proposals were to be paid for. We have never said that the commitment for pensions and other benefits was other than a rising bill. A rising bill is an inescapable reality which will face any Government and any scheme. We do not claim, and have not claimed, that any alternative which we put forward would cost significantly less in contributions. But what we claim is that the present proposals are more costly than they need to be, that they try to sugar the pill of higher contributions by building up big commitments for the future and, perhaps much more important, that these big increases in contribution are on top of very substantial increases in taxation of earnings and profits and also on top of the increase in contributions last November of no less than £430 million.
So, although we accept that an increase in contributions will be required to meet the bill for pensions and other benefits, it is emerging that there is a fundamental difference here between our approach and the approach of the Treasury Bench. Our proposals for contributions would be linked with the pledges which we have made with regard to the reduction of taxation on earnings and profits, whereas there is very little hope of that from right hon. Gentlemen opposite.
The right hon. Gentleman made much of the case that the lower paid would pay less under his arrangements. He did not


say anything like so much about the substantial increase in contributions which will be paid by those getting average earnings and upwards. For example, a man on £1,900 a year will pay an increase of 5s. 5d. a week and the employer will pay 7 per cent. on his total payroll. The contributions for married women will be even higher, a point emphasised by my hon. Friend the Member for Melton (Miss Pike), who spoke about the disincentive effect which this will have on married women going out to work. It was also mentioned by the hon. Member for Pontypool (Mr. Abse), in his interesting speech about the family in this connection.
There is no doubt that these compulsory contributions by married women will bite very deep. There are about 4 million married women in employment—some working part-time—who pay only 8d. a week, the present industrial injuries contribution. The increases for them will be very steep and will come into operation before equal pay comes into operation. For example, married women earning £450 a year, not a very high salary by any standards, will have to pay an increase of no less than 10s. 11d. a week. A married woman with £1,000 a year will pay an increase of 15s. 10d. a week, while a married woman with a salary of £1,900 a year, the top end of the scale, will pay an increase of no less than £1 12s. 5d. a week. By any standards these are substantial increases in contributions for married women. The Government have not made out a case for making married women contribute compulsorily to the scheme.

Miss Herbison: In dealing with how his party will pay for the scheme which it proposes, the hon. Gentleman said that there will, on the one hand, be cuts in taxation and, on the other, increases in contributions. Does he not realise that the low-wage earner with a family does not pay direct taxation, and that he is the person who, under the scheme which the hon. Gentleman is putting forward, will have the higher contribution to pay?

Mr. Dean: I think that the right hon. Lady has misunderstood what I was saying. I did not explain it fully because of the lack of time. The lower-paid people would benefit from graduation of contri-

butions in much the same way as they would under the proposal being put forward by the right hon. Gentleman.
I now turn to the occupational pension schemes, of which 12 million or more people are now members. There is a strong feeling amongst the members of those schemes and amongst the experts that they will suffer and that the abatement terms are not adequate.
I very much regretted one part of the right hon. Gentleman's speech when he made, I thought, rather sneering remarks about what he called the "insurance establishment" and "pensioneers". It comes ill from the right hon. Gentleman to talk about pensioneers and pensioneering. When he talks about the "insurance establishment" he might remember that the expertise and knowledge which the insurance people bring to occupational pension schemes and to other matters is of considerable credit and importance to the economic prosperity of the country.
There is little doubt that here we come to one of the fundamental differences of approach between the Government and ourselves. The Government, in effect, are saying, "We know best what pensions people should have and we intend to impose our will through the State scheme. If people happen to have their own pension arrangements and they can fit them in with the State scheme, then they can do so. If not, they will have to abandon them."
In our view, this is intolerable. It undermines family responsibility and individual freedom of choice, and it makes no sense economically either, because it will enormously increase the eventual cost to the State. Indeed, it is the kind of scheme which, in our view, will put Britain firmly on the road to a State monopoly in pensions.
The right hon. Gentleman admits—he did so again today—that there will be "a slowing up in the growth of pension funds."

Mr. Crossman: For two or three years.

Mr. Dean: All right. The right hon. Gentleman says for two or three years. However short or long a time it may be, this is a very damaging admission to come from any Minister, particularly one who is responsible for the biggest spending Department in Whitehall.
The right hon. Gentleman tries to minimise this by saying that it is only 10 per cent. of total savings. But it amounts to £800 million a year and involves no less than two-fifths of personal savings. The Secretary of State for Social Services can do a great deal to encourage personal savings through occupational pension schemes and the advance of security and a property-owning democracy. On the other hand, he can do a great deal to discourage them. That is the road upon which he has set himself through inadequate arrangements for abatement.
The almost unanimous view amongst experts is that this scheme will damage the development of occupational pension schemes and public service pension schemes and the savings which they generate. The National Association of Pension Funds estimates that about 15,000 schemes covering half a million people may be terminated as a result of the Bill, and the Life Offices' Association also feels that there will be damage to schemes. Inevitably, it will be the smaller schemes, the newer schemes, those which have the greatest growth potential for the future, which will suffer.
We are entirely unclear, and we are no wiser after hearing the right hon. Gentleman's speech, about the future of public service pension schemes, about which hon. Members on both sides of the House are particularly concerned. All we know is that there will be no change in respect of past service and that there will be no alteration before the State retirement age. Those are the assurances which we have had from Ministers up to now. They are welcome assurances, but we would not expect Ministers retrospectively to withdraw rights in occupational pension schemes. Indeed, in many instances they are written into legislation. The Police Pensions Act, 1948, is probably the most classic example of that. Thus, in giving that pledge, Ministers are saying nothing that we do not know already.
What matters is the pension rights based on future service. On that, all we have been told is that negotiations will take place through the normal channels for these matters, and that it will be a long time before they are completed. In other words, unless the Minister of State can tell us something more tonight, it

looks very much as though the Bill will pass through the House without any of us here, or any of our constituents who are members of public service pension schemes, having the slightest idea of what their pension rights will be for future service. This is a very unsatisfactory way in which to deal with a Bill of this kind, and with so important a matter. My right hon. Friend the Member for Kingston-upon-Thames referred to the pension schemes for the Civil Service and the Armed Forces, two schemes which are non-contributory at the moment. Are the rights under those schemes to be eroded by some of them being taken over from what is now a non-contributory scheme and transferred to what will be a contributory scheme?
Those are the questions which we have been asking in these debates, and we are still none the wiser. What we do know is that inherent in this scheme there is no firm basis for effective abatement, for effective contracting out, because, inevitably, with a scheme financed as this one will be, the tendency will be for the subsidisers to contract out, and for the subsidised to remain in. And the more that happens, the more the finances of the scheme will be in disarray, and the quicker the increase in contributions will come about than forecast.
The uncertainties have been added to, because I note that under the Bill the previous proposal that there should be a review of the abatement terms every four years, with possible additions at two years if there were exceptional circumstances, has gone, and that Clause 54 now appears to provide for a revision of the terms of abatement at any time. This is, therefore, an additional uncertainty for occupational schemes.
Then there is the effect of the tax rule, which was mentioned by my hon. Friend the Member for St. Ives (Mr. Nott). During the debate on 4th December we were told by the Minister without Portfolio that these tax rules had been looked at, in particular, that the existing maximum benefit was under review, and that there would be an announcement about this in due course. If we are to judge this Bill effectively it is essential to know what changes are to be made. All these doubts and uncertainties—and they are genuine among the members of schemes—will


have an effect not only on the terms of service of those who are members of public pension schemes at the moment, but on future recruitment.
If one looks at the situation in teaching, nursing, doctors—in almost any field of public service that one can think of—one can see how damaging is this uncertainty as to the future of these schemes. In our view, people should have the choice to contribute for a pension related to earnings, but this is much better done through approved occupational schemes or similar arrangements for the self-employed. We recognise and we have proposed, as my noble Friend said, that there should be a reserve earnings-related State scheme which would be obligatory on employers not providing an approved occupational scheme. This would be on value for money lines and would be price-protected.
We recognise that occupational pension schemes are not perfect. They have gaps and weaknesses, but they are growing and improving all the time. One of the bars to progress at the moment are the rules and regulations which govern these schemes, which restrict the amount of benefits which can be made available for widows, for example, which make preservation much more difficult than it need be, and also make it difficult for these schemes to make an adequate price protection. Given a simplification of the rules governing these schemes, and amendments to encourage the best practice, given simpler contracting-out conditions and a State scheme which provides a firm base, these occupational schemes can make an immense and growing contribution to saving and security in old age.
The right hon. Gentleman mentioned preservation, and he criticised the C.B.I. in its attitude to this. I hope he has seen—I understand that he has—that the C.B.I. is intending only this week to give very strong encouragement to its members to look at their schemes and, where preservation is not provided for, try to write it in.

Mr. Eric S. Heffer: It took them long enough.

Mr. Dean: I am very glad that the Government are setting an example in

this respect with regard to the Armed Forces, civil servants and the National Health Service. It is quite right that the example should come from the Government of the day, for we are anxious that preservation or transferability, whichever is most appropriate, should come as quickly as possible. We must recognise, too, that we do not want to put on these schemes burdens which will make it impossible for them to continue.
The scheme which we need for the future should have integrity, simplicity and clarity. The proposal which we are now considering has none of these things. We welcome some of the provisions, especially those for widows and the disabled, but the main part of the Bill dealing with pensions is totally unacceptable. It treats existing pensioners as second-class citizens and, therefore, ignores the first priority of a State pension scheme. It continues to ignore the over-80s. It builds up very heavy commitments for the future—commitments which the next generation will have to shoulder. It means a big increase in contributions and costs on industry, on top of enormous and penal rates of taxation which it has already had. It will damage the occupational pension schemes and the savings which they generate.
Finally, the scheme is introduced by a dying Government in the last gasps of office. It is quite wrong that such a Government, at the end of a Parliament, should impose such a major reform of this kind, and it is for those reasons that I invite my right hon. and hon. Friends to vote for the reasoned Amendment.

9.30 p.m.

The Minister of State, Department of Health and Social Security (Mr. David Ennals): I should like to begin by congratulating the hon. Member for Wellingborough (Mr. Fry) on his maiden speech. He spoke with a good deal of knowledge on the subject and showed his sympathy for the elderly. He said that the scales had been tipped against the aged. The purpose of the Bill is to see that they are tipped in favour of the aged and of others who are under-privileged in our society—the sick and the widows. I also would like to welcome back the hon. Lady the Member for Melton (Miss Pike) after her illness, and also my right hon. Friend.
There have been some notable speeches in this debate, not least from my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley), who was speaking on behalf of the disabled with a great deal of knowledge and experience, and from my hon. Friend the Member for Pontypool (Mr. Abse) on family problems.
This has been an unusual debate. Normally, a debate on Second Reading of a Bill is the beginning of the debate, but we have been involved in a debate for the past 12 months, ever since the Government published their White Paper on 28th January. The debate started pretty sluggishly, when people said they did not understand the scheme. The noble Lord the Member for Hertford (Lord Balniel) maintains his position of being unable to understand it right through to this very day, and proudly proclaims it.
Certainly, the debate became a little more rollicking some months ago when some individuals and organisations proved that they did not understand the scheme by making statements which were so outrageous as naturally to create alarm and despondency in people's minds. Happily, I believe that we have moved out of that period. I think that there is a growing recognition of the value of this scheme. Certainly, the publication of the White Paper on partial contracting out removed a good deal of uncertainty. We have since had statements of approval from the T.U.C. and the recent resolution which the special conference of N A.L.G.O. passed, and there have been a number of other indications that people are understanding the scheme's value.
I did hope that today's debate would allow us to hear an exposition of the Conservative case. After 12 months of debate, the noble Lord treated us to the same oft-repeated criticisms of the scheme. Only in the last few minutes did he suddenly hint at a Conservative approach. I do not know whether he has been taken to task by the Leader of the Opposition, whom we are glad to see beside him tonight. As I saw the shaft of light of this Conservative approach, I wondered what sort of proposal was about to come forward. It looked to me like a non-starter, a botched up job, like the 1959 Act. Writing in today's Daily Mail, Walter Terry referred to "the quantity, the quality and the intensity"

of the four years' homework done by the Opposition: he said that it was "awesome". Actually, that was a misprint; he intended to say that it was "awful".
The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) made a number of interesting Committee points but mainly it was his purpose to water down the Bill, to remove from it some of those significant things which will give hope for the future. He said that the pension provisions were too ambitious. He criticised the procedure for dynamism and for protection against inflation. In the situation which we face, the right hon. Gentleman must bear a heavy responsibility for the fact that all this time has had to pass before we bring in a scheme worthy of our people and of our society. In 1959 he introduced a scheme which was patently unsuccessful. He now suggests that we should postpone our Measure and establish a Commission, giving a few further years to thinking about what should be done. I did not notice that he established a Commission when he introduced his own Measure; it might have been better if he had.
He and a number of other hon. Members—my right hon. Friend the Member for Sowerby (Mr. Houghton), my hon. Friend the Member for Brentford and Chiswick (Mr. Barnes) and the hon. Member for St. Ives (Mr. Nott)—dealt with what they called this "promissory pension", the suggestion that the new scheme imposes heavy liabilities on future generations, which those generations may repudiate. Why do they express those concerns? We as a generation have not let down our predecessors, and I do not see why we should take the cynical view that the next generation will behave irresponsibly towards those in retirement. The 1959 Measure itself provided a promissory pension; the modest benefits now being paid under it are paid by the next generation.
Let us look at the evidence of the past 20 years. We are prepared to pay almost twice as big a proportion of our earnings for pensions as our predecessors when the 1946 Act became law. The increase expected by the Government Actuary for the next 30 years will be, proportionately, substantially less than this. But the increase will be steady and not on the past hand-to-mouth basis. In any case, as living standards rise and a smaller


proportion is required for the sheer necessities of life, it is surely reasonable to expect people to increase the proportion of their earnings devoted to provision for old age.
I do not believe that we need fear that, with this modest increase spread over more than a generation, the next generation will not fulfil its responsibilities, as we have tried to fulfil ours.

Mr. Boyd-Carpenter: I think that the hon. Gentleman has missed the point; at least, the point that I tried to make. I questioned why he assumed that a future generation will be prepared to give priority in its expenditure to pension provisions in which the biggest subsidy from public funds goes to the better-off. Is that so manifestly right that one can assume that another generation will act on it?

Mr. Ennals: It is not just public funds. It is individual funds. People will be earning those pensions for themselves. That is what entitlement is about.
We cannot get our pension provision right by not planning ahead, by staggering from two-year period to two-year period with the sort of botched-up job that the right hon. Gentleman produced. We have learned that half-measures are not the answer to the problems we face, and that it is necessary to have the sort of fundamental change which the Bill envisages. When I heard the noble Lord proposing what sounded like another sort of hybrid built on to an existing scheme, I thought that he had simply not done his homework.
Several right hon. and hon. Members have referred to public service pensions, and I want to say a few words on this subject. We have never tried to disguise the fact that our new scheme will mean changes in occupational arrangements. Some people have chosen to take that as meaning that public service schemes would be wound up, or that they would lose their lump sums, or that no one would be able to retire on pension before the State pension age. How these rumours got about, I do not know, but they did and therefore we had to give the sort of assurances that have been criticised.
I want to deal with the assertion that by "adjustments" or "modifications" we necessarily mean a cut-back. This in crude terms is what the Opposition Amendment says. Our aim is to ensure that members of public service pension schemes get the best possible value for money. That is in everyone's interest. It means constructing new arrangements taking account of the new State scheme and without avoidable gaps or duplications.
Anyone would think, hearing hon. Members opposite, that public servants thought the existing schemes were perfect. This is not so. There are many ways in which we and they want to see improvements. Working together with the representatives of the public servants in negotiation, we shall be able to bring about schemes that will be more satisfactory and will meet their needs.
Some concern has been expressed about the effect of the new scheme on savings. My right hon. Friend dealt with the point. He said that, in the short term, the surplus in the State scheme would more than offset the temporary cut-back in new savings through occupational schemes and that, in the longer term, there was every reason to expect the growth of savings through occupational schemes to be resumed.
In view of some remarks in the debate, I should make one or two points about why we feel, with a substantial measure of confidence, that there will be a steady, continuing growth, after perhaps a plateau of the first two or three years, in occupational pension schemes. Not only do we expect this, but we want it to happen.
First, the orderly development in State pension provisions which the new scheme ensures will remove the atmosphere of uncertainty which has existed for a number of years. Secondly, we can recognise the fact that lower-paid workers are not now especially interested in occupational schemes because they know they will have supplementary benefits to turn to and that they would have a pension which might not take them above the supplementary benefit level. We are, in the new scheme, introducing for lower-paid workers pensions which will not only take them above the level of supplementary benefit but be on a contribution


level which will be less than they are paying at present. I believe that this will mean that a wider section of the population will want to make some provision for occupational pensions.
One of the criticisms of the new scheme is that we cannot tell a man in money terms what pension he could expect to receive in retirement. Several hon. Members opposite have said, "Tell us exactly what we will get in ten or 15 or 20 years from now." It would be a poor scheme if we could do that. One of the grave weaknesses of the scheme of the right hon. Member for Kingston-upon-Thames was that not only did those who were contributing know that they were going to get a very modest entitlement, but they knew precisely what they were going to get and that it would not take into consideration changes in earnings levels or great changes in prices after the pension had been awarded. If we were ourselves to introduce a scheme which told a man what his pension would be, it would mean that we were not coming to terms with the need for a scheme related to higher earnings levels as well as being protected against higher prices after the award had been made.
I am not sure that we ourselves have been clear enough in our explanations to the new scheme contributors of what the true value of the pension will be. In saying that an average earner will get a pension of about 43 per cent. of his life's average earnings, we have been referring to the single man. Most pensioners are married, however, and will therefore get more. We have ignored taxation considerations. A much clearer way of explanation would be if we were to relate a man's pension to take-home pay. For instance, at the 1968–69 tax levels, a married man earning £1,000 a year would retire with a pension of 80 per cent. of his average take-home pay during his working life, while a married man earning £1,250—the average earnings at present—would retire with a pension of 72 per cent. For a man earning £1,900—one and a half times the average earnings—the figure would be 57 per cent. This, I remind the House, is for a man without an occupational pension at all and shows that he will get a very good deal under the new scheme.
I want to say something in relation to the Government Actuary. My right hon. Friend the Member for Sowerby (Mr. Houghton) referred to him and in a recent statement in the House by the hon. Member for Kensington, South (Sir B. Rhys Williams) there were some derogatory references to him. It is absolutely important that the House should fully understand that the Government Actuary is acting in an independent professional capacity. He does not accept instructions from the Government. He does what his judgment tells him to do. He is highly qualified and experienced. It would be quite wrong, particularly for hon. Members opposite who have been in Government, to make any suggestion that the Government Actuary is not a completely independent figure from whom we can take advice.

Mr. A. P. Costain: Will the hon. Gentleman make clear that when he talks about "take-home pay" he means free of tax?

Mr. Ennals: This is net. In each case I have taken into consideration the tax effect on the pension as well as on earnings. Both figures were net.
I move to the argument of the hon. Member for Cornwall, North (Mr. Pardoe). Whatever one may say, the Liberal Party has at least proposed an alternative to the Government scheme. The party should be given credit for that even though I shall seek to be very critical of it. It proposes an earnings-related social security tax financing a universal flat-rate benefit. Hon. Members of the Liberal Party want to raise the flat-rate pension over a seven-year period to a level which would provide a married couple with half national average earnings. Two-thirds of the cost would be paid by employers and one-third by employees. If this were to be carried out—I understand that the hon. Member may be prepared to have a more modest scheme—the scheme as proposed would cost over £1,000 million a year more than the Government proposals by the end of the seven-year build-up period.
In addition, the heavy burden which would fall on employers would produce a sharp rise in prices which I think would have a very unfortunate effect in


this country. If the Liberal Party's proposals were to be put forward they would have a very serious effect indeed on occupational pensions. When hon. Members reflect on it I think they may see this themselves. This idea of moving to an earnings-related contribution with a flat-rate pension is one which now seems to have found a new convert in the noble Lord speaking on behalf of the Conservative Party. He shed a brief shaft of light on his new proposals and this, I understand, is what he was suggesting. If he is to increase the flat-rate pension substantially for all, in my calculation the contribution under his proposal would hardly differ from that proposed in the Government Measure.
I do not know whether the noble Lord will tell us—I expect he will at some stage—what sort of level of contribution he is thinking of. I do not know what sort of level of flat-rate benefit he has in mind. I do not know what his view is, but the effect of his scheme by providing an earnings-related contribution for a flat-rate pension would be quite the most redistributive of any system we could find. What sort of reaction does he expect to get from organisations such as N.A.L.G.O. and others which represent those with middle and higher earnings when they hear that however much they contribute to his scheme it will not affect the level of their pension? We have had some criticism from those organisations but I can promise the noble Lord that if anyone took his proposals seriously he would get a very much sharper reaction. Most people are in favour of earnings-related contributions for earnings-related benefits.
The noble Lord outlined his proposal for only about half a minute. I do not know whether this scheme would have a rapid maturity, as our scheme will have. I do not know whether there would be the element of subsidy which was contained in the scheme which the right hon. Member for Kingston-upon-Thames introduced in 1959. I do not know whether this new pension scheme which has suddenly been dreamed up would take the place of the scheme which the right hon. Gentleman introduced 10 years ago. I do not know, the House does not know, and I do not know whether the noble Lord himself knows.
What is the Opposition's case against the carefully worked out proposals of the Government? Are they saying that we are offering too generous a deal for those who retire under the new scheme? It they are saying that we are providing too generous pensions—and the argument partly has been about promissory notes—they should tell the country that our proposals are too generous for the pensioners. Or are they opposed to the redistributive point that the lower paid will have a proportionately higher pension for their contributions? If so, let them tell the country that they think that we are being too generous to low wage earners who, on the whole, do not have access to occupational pension schemes.
The Opposition have been making great play of what they call the vast increase in the burden of taxation and contributions. This is just sheer misrepresentation. Between April, 1955, and October, 1964, slightly less than 10 years, employees' contributions—[Interruption.]—I should be grateful if the noble Lord would pay attention because I am referring to a period when his party was in office—increased by 2·7 per cent. of average earnings, and employers' contributions by 2·5 per cent. of average earnings. From 1964 to 1969, employees' contributions increased by 0·9 per cent. of earnings and employers' contributions by 1·5 per cent. of earnings. By April, 1972, it will have gone up by another 0·55 per cent. for the employee. But the Government Actuary estimates that between 1972 and the turn of the century the percentage increase will have been 1·5 per side. Therefore, this increase in the demands made on employees and employers is not such a heavy proportionate increase as there has been in the past.
As for taxation—

Mr. Dean: Mr. Dean rose—

Mr. Ennals: The time is short and I want to bring my argument to a close.
As for taxation, the Exchequer's share will remain unchanged. The hon. Member for Cornwall, North has been asking why it should be 18 per cent. It is difficult to produce a rational explanation for this figure as opposed to 15, 20 or 25 per cent. It seemed to the previous Government and ourselves that this was


about the right Exchequer contribution, and therefore it will continue.

Mr. Dean: Would the hon. Gentleman complete this interesting argument by saying what happened to tax rates during the periods he has quoted?

Mr. Ennals: That will be an interesting subject for another debate, but not tonight five minutes before I conclude my speech.
The other major case of the Opposition against our proposal is that it does not do enough for existing pensioners. When we raised the level of benefits last November, there was no suggestion by the Opposition that the increase should have been greater. They have welcomed the biennial increases by which pensioners in future will know for certain that they will be due to get an increase which will at least cover rises in the cost of living. I say "at least" because the noble Lord the Member for Hertford seems to assume that what we have written in the Bill establishes that it will simply cover price rises. This is the statutory minimum. The expectation and hope is that Governments will do much more than that. In fact, the scheme has been costed on the assumption that they will do very much more than that.
I want to ask the Opposition, because they have not made their position clear, if they say that we are not doing enough for existing pensioners, would they put into the Bill a commitment every two years to raise the level of pensions in line, not with prices, but with earnings? We will look forward to their Amendment in Committee if that is what they want to do. The old people would not react very favourably to criticism from the other side that in the plans that we are putting forward the Government are not making proper provision for people in their old age.
The Government's proposals, which will be approved tonight, are a charter for the under-privileged. They will help to meet the needs of most of those in distress in our society. Let us look at some of the principal provisions—[Interruption.]

Mr. Speaker: Order. Mr. Ennals.

Mr. Ennals: Thank you, Mr. Speaker. Perhaps the party opposite are not inter-

ested in the principal provisions of the Bill. If they say that they do not understand it, perhaps if they give us four minutes of silence they will understand a little more.
First, the Bill will give a fair deal for existing pensioners with a firm guarantee of pension increases and protection against inflation. Secondly, there will be steadily expanding pensions for the future which will greatly reduce the number of people who will be dependent upon supplementary benefits. Thirdly, there will be a fairer system of contributions. Hon. Members opposite talk about the increased cost of the scheme. Let them not forget that 8 million workers will pay less in weekly contributions under the new scheme than under the existing scheme.
Fourthly, there will be greatly improved provision for older widows in our society who will inherit the whole of the earnings-related pension of their husbands. This is an enormous stride forward. If the Bill did nothing more than improve the provision for widowhood we would be proud of it. Also, however, it introduces a widow's pension for all women who may unfortunately lose their husbands after they have passed their fortieth birthday. This will remove a serious omission in our present widowhood provisions.
Sixthly, there will be three major advances—[Interruption.] It is remarkable that an Opposition Front Bench who claim not to understand the scheme should be talking, chattering and laughing while it is being explained to them. One of the major provisions, as my hon. Friend the Member for Stoke-on-Trent, South said, is the improvements in provisions for the sick and disabled. The new invalidity pension recognises that we have in our society an increasing number of elderly people who are sick enough that they will not return to work. We have, secondly, the more generous earnings rule for the wife of an invalid or a man who is disabled, and, thirdly, the introduction of the new attendance allowance for the very severely disabled.
I believe that the Bill, when it becomes law, will be seen as a giant achievement in the struggle to improve the lot of the under-privileged in our society.

Question put, That the Amendment be made:—

The House divided: Ayes 236, Noes 307.

Division No. 42.]
AYES
[10.0 p.m.


Alison, Michael (Barkston Ash)
Gilmour, Ian (Norfolk, C.)
More, Jasper


Allason, James (Hemel Hempstead)
Glover, Sir Douglas
Morgan, Geraint (Denbigh)


Amery, Rt. Hn. Julian
Glyn, Sir Richard
Morgan-Giles, Rear-Adm.


Archer, Jeffrey (Louth)
Godber, Rt. Hn. J. B.
Morrison, Charles (Devizes)


Astor, John
Goodhart, Philip
Mott-Radclyffe, Sir Charles


Atkins, Humphrey (M't'n &amp; M'd'n)
Goodhew, Victor
Munro-Lucas-Tooth, Sir Hugh


Awdrey, Daniel
Gower, Raymond
Nabarro, Sir Gerald


Baker, Kenneth (Acton)
Grant, Anthony
Neave, Airey


Baker, W. H. K. (Banff)
Grant-Ferris, Sir Robert
Nicholls, Sir Harmar


Balniel, Lord
Gresham Cooke, R.
Noble, Rt. Hn. Michael


Barber, Rt. Hn. Anthony
Griffiths, Eldon (Bury St. Edmunds)
Nott, John


Batsford, Brian
Gurden, Harold
Onslow, Cranley


Beamish, Col. Sir Tufton
Hall, John (Wycombe)
Orr, Capt. L. P. S.


Bell, Ronald
Hamilton, Michael (Salisbury)
Orr-Ewing, Sir Ian


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Harris, Reader (Heston)
Osborn, John (Hallam)


Berry, Hn. Anthony
Harrison, Brian (Maldon)
Page, Graham (Crosby)


Biffen, John
Harvey, Sir Arthur Vere
Page, John (Harrow, W.)


Biggs-Davison, John
Harvie Anderson, Miss
Pearson, Sir Frank (Clitheroe)


Birch, Rt. Hn. Nigel
Hastings, Stephen
Peel, John


Black, Sir Cyril
Hawkins, Paul
Percival, Ian


Blaker, Peter
Hay, John
Peyton, John


Boardman, Tom (Leicester, S.W.)
Heald, Rt. Hn. Sir Lionel
Pike, Miss Mervyn


Bossom, Sir Clive
Heath, Rt. Hn. Edward
Pink, R. Bonner


Boyd-Carpenter, Rt. Hn. John
Heseltine, Michael
Pounder, Rafton


Boyle, Rt. Hn. Sir Edward
Higgins, Terence L.
Powell, Rt. Hn. J. Enoch


Brewis, John
Hiley, Joseph
Price, David (Eastleigh)


Brinton, Sir Tatton
Hill, J. E. B.
Prior, J. M. L.


Bromley-Davenport, Lt.-Col. Sir Walter
Hogg, Rt. Hn. Quintin
Pym, Francis


Brown, Sir Edward (Bath)
Holland, Philip
Quennell, Miss J. M.


Bruce-Gardyne, J.
Hordern, Peter
Rawlinson, Rt. Hn. Sir Peter


Bryan, Paul
Hornby, Richard
Rees-Davies, W. R.


Buchanan-Smith, Alick(Angus, N &amp; M)
Howell, David (Guildford)
Renton, Rt. Hn. Sir David


Buck, Antony (Colchester)

Rhys Williams, Sir Brandon


Bullus, Sir Eric
Hutchison, Michael Clark
Ridley, Hn. Nicholas


Burden, F. A.
Iremonger, T. L.
Ridsdale, Julian


Campbell, B. (Oldham, W.)
Irvine, Bryant Godman (Rye)
Rippon, Rt. Hn. Geoffrey


Campbell, Gordon (Moray &amp; Nairn)
Jenkin, Patrick (Woodford)
Robson Brown, Sir William


Carlisle, Mark
Jennings, J. C. (Burton)
Rodgers, Sir John (Sevenoaks)


Carr, Rt. Hn. Robert
Johnson Smith, G. (E. Grinstead)
Rossi, Hugh (Hornsey)


Cary, Sir Robert
Jopling, Michael



Channon, H. P. G.
Joseph, Rt. Hn. Sir Keith
Royle, Anthony


Chataway, Christopher
Kaberry, Sir Donald
Russell, Sir Ronald


Chichester-Clark, R.
Kerby, Capt. Henry
Scott-Hopkins, James


Clark, Henry
Kershaw, Anthony
Sharples, Richard


Clegg, Walter
Kimball, Marcus
Shaw, Michael (Sc'b'gh &amp; Whitby)


Cooke, Robert
Kirk, Peter
Silvester, Frederick


Cooper-Key, Sir Neill
Kitson, Timothy
Smith, Dudley(W'wick &amp; L'mington)


Cordle, John
Knight, Mrs. Jill
Smith, John (London &amp; W'minster)


Corfield, F. V.
Lambton, Viscount
Speed, Keith


Costain, A. P.
Lancaster, Col. C. C.
Stainton, Keith



Lane, David
Stodart, Anthony


Craddock, Sir Beresford (Spelthorne)
Langford-Holt, Sir John
Stoddart-Scott, Col. Sir M.


Crouch, David
Legge-Bourke, Sir Harry
Summers, Sir Spencer


Crowder, F. P.
Lewis, Kenneth (Rutland)
Tapsell, Peter


Cunningham, Sir Knox
Lloyd, Rt. Hn. Selwyn (Wirral)
Taylor, Sir Charles (Eastbourne)


Currie, G. B. H.
Longden, Gilbert
Taylor, Edward M. (G'gow, Cathcart)


Dalkeith, Earl of
McAdden, Sir Stephen
Taylor, Frank (Moss Side)


Dance, James
MacArthur, Ian
Temple, John M.


d'Avigdor-Goldsmid, Sir Henry
Maclean, Sir Fitzroy
Thatcher, Mrs. Margaret


Dean, Paul
Macleod, Rt. Hn. Iain
Tilney, John


Digby, Simon Wingfield
McMastsr, Stanley
Turton, Rt. Hn. R. H.


Dodds-Parker, Douglas
Macmillan, Maurice (Farnham)
van Straubenzee, W. R.


Doughty, Charles
McNair-Wilson, Michael
Vickers, Dame Joan


Douglas-Home, Rt. Hn. Sir Alec
McNair-Wilson, Patrick (NewForest)
Waddington, David


Drayson, G. B.
Maddan, Martin
Walker, Peter (Worcester)


du Cann, Rt. Hn. Edward
Maginnis, John E.
Walker-Smith, Rt. Hn. Sir Derek


Eden, Sir John
Marples, Rt. Hn. Ernest
Wall, Patrick


Elliot, Capt. Walter (Carshalton)
Marten, Neil
Walters, Dennis


Emery, Peter
Maude, Angus
Ward, Christopher (Swindon)


Errington, Sir Eric
Maudling, Rt. Hn. Reginald
Ward, Dame Irene


Farr, John
Mawby, Ray
Weatherill, Bernard


Fisher, Nigel
Maxwell-Hyslop, R. J.
Wells, John (Maidstone)


Fortescue, Tim
Mills, Peter (Torrington)
Whitelaw, Rt. Hn. William


Foster, Sir John
Mills, Stratton (Belfast, N.)
Wiggin, A. W.


Fraser, Rt. Hn. Hugh (St'f7ord &amp; Stone)
Miscampbell, Norman
Williams, Donald (Dudley)


Fry, Peter
Mitchell, David (Basingstoke)
Wilson, Geoffrey (Truro)


Galbraith, Hn. T. G.
Monro, Hector
Wolrige-Gordon, Patrick


Gibson-Watt, David
Montgomery, Fergus
Wood, Rt. Hn. Richard




Woodnutt, Mark
Wylie, N. R.
TELLERS FOR THE AYES:


Worsley, Marcus
Younger, Hn. George
Mr. R. W. Elliott and


Wright, Esmond

Mr. Reginald Eyre.




NOES


Abse, Leo
Evans, Fred (Caerphilly)
Lee, Rt. Hn. Frederick (Newton)


Albu, Austen
Evans, Ioan L. (Birm'h'm, Yardley)
Lee, Rt. Hn. Jennie (Cannock)


Allaun, Frank (Salford, E.)
Faulds, Andrew
Lee, John (Reading)


Alldritt, Walter
Fernyhough, E.
Lestor, Miss Joan


Allen, Scholefield
Finch, Harold
Lever, Rt. Hn. Harold (Cheetham)


Anderson, Donald
Fitch, Alan (Wigan)
Lewis, Arthur (W. Ham, N.)


Archer, Peter (R'wley Regis &amp; Tipt'n)
Fletcher, Rt. Hn. Sir Eric (Islington, E.)
Lewis, Ron (Carlisle)


Armstrong, Ernest
Fletcher, Raymond (Ilkeston)
Lipton, Marcus


Ashley, Jack
Fletcher, Ted (Darlington)
Lomas, Kenneth


Ashton, Joe (Bassetlaw)
Foley, Maurice
Loughlin, Charles


Atkins, Ronald (Preston, N.)
Foot, Michael (Ebbw Vale)
Luard, Evan


Atkinson, Norman (Tottenham)
Forrester, John
Lyon, Alexander W. (York)


Bacon, Rt. Hn. Alice
Fowler, Gerry
McBride, Neil


Bagier, Gordon A. T.
Fraser, John (Norwood)
McCann, John


Barnes, Michael
Freeson, Reginald
MacColl, James


Barnett, Joel
Galpern, Sir Myer
MacDermot, Niall


Benn, Rt. Hn. Anthony Wedgwood
Gardner, Tony
Macdonald, A. H.


Bennett, James (G'gow, Bridgeton)
Garrett, W. E.
McElhone, Frank


Binns, John
Ginsburg, David
McGuire, Michael


Bishop, E. S.
Golding, John
McKay, Mrs. Margaret


Blackburn, F.
Gordon Walker, Rt. Hn. P. C.
Mackenzie, Gregor (Rutherglen)


Blenkinsop, Arthur
Gray, Dr. Hugh (Yarmouth)
Mackie, John


Booth, Albert
Greenwood, Rt. Hn. Anthony
Mackintosh, John P.


Boston, Terence
Gregory, Arnold
Maclennan, Robert


Boyden, James
Grey, Charles (Durham)
MacMillan, Malcolm (Western Isles)


Bradley, Tom
Griffiths, Eddie (Brightside)
McMillan, Tom (Glasgow, C.)


Bray, Dr. Jeremy
Griffiths, Will (Exchange)
McNamara, J. Kevin


Brooks, Edwin
Gunter, Rt. Hn. R. J.
MacPherson, Malcolm


Broughton, Sir Alfred
Hamilton, James (Bothwell)
Mahon, Peter (Preston, S.)


Brown, Hugh D. (G'gow, Provan)
Hamilton, William (Fife, W.)
Mallalieu, E. L. (Brigg)


Buchan, Norman
Hamling, William
Mallalieu, J.P.W. (Huddersfield, E.)


Buchanan, Richard (G'gow, Sp'burn)
Hannan, William
Manuel, Archie


Butler, Herbert (Hackney, C.)
Harrison, Walter (Wakefield)
Mapp, Charles


Butler, Mrs. Joyce (Wood Green)
Hart, Rt. Hn. Judith
Marks, Kenneth


Callaghan, Rt. Hn. James
Haseldine, Norman
Marquand, David


Cant, R. B.
Hattersley, Roy
Marsh, Rt. Hn. Richard


Carmichael, Neil
Hazell, Bert
Mason, Rt. Hn. Roy


Castle, Rt. Hn. Barbara
Healey, Rt. Hn. Denis
Maxwell, Robert


Chapman, Donald
Heffer, Eric S.
Mayhew, Christopher


Coe, Denis
Henig, Stanley
Mellish, Rt. Hn. Robert


Coleman, Donald
Herbison, Rt. Hn. Margaret
Mendelson, John


Concannon, J. D.
Hilton, W. S.
Mikardo, Ian


Conlan, Bernard
Hobden, Dennis
Millan, Bruce


Corbet, Mrs. Freda
Hooley, Frank
Miller, Dr. M. S.


Craddock, George (Bradford, S.)
Houghton, Rt. Hn. Douglas
Milne, Edward (Blyth)


Crawshaw, Richard
Howarth, Robert (Bolton, E.)
Mitchell, R. C. (S'th'pton, Test)


Cronin, John
Howie, W.
Molloy, William


Crosland, Rt. Hn. Anthony
Hoy, Rt. Hn. James
Morgan, Elystan (Cardiganshire)


Crossman, Rt. Hn. Richard
Huckfield, Leslie
Morris, Alfred (Wythenshawe)


Dalyell, Tam
Hughes, Rt. Hn. Cledwyn (Anglesey)
Morris, Charles R. (Openshaw)


Darling, Rt. Hn. George
Hughes, Hector (Aberdeen, N.)
Morris, John (Aberavon)


Davidson, Arthur (Accrington)
Hughes, Roy (Newport)
Moyle, Roland


Davies, E. Hudson (Conway)
Hunter, Adam
Mulley, Rt. Hn. Frederick


Davies, G. Elfed (Rhondda, E.)
Hynd, John
Murray, Albert


Davies, Dr. Ernest (Stretford)

Neal, Harold


Davies, Rt. Hn. Harold (Leek)
Irvine, Rt. Hn. Sir Arthur
Newens, Stan


Davies, Ifor (Gower)
Jackson, Peter M. (High Peak)
Oakes, Gordon


Davies, S. O. (Merthyr)
Janner, Sir Barnett
Ogden, Eric


de Freitas, Rt. Hn. Sir Geoffrey
Jay, Rt. Hn. Douglas
O'Halloran, Michael


Delargy, H. J.
Jeger, George (Goole)
O'Malley, Brian


Dell, Rt. Hn. Edmund
Jeger, Mrs. Lena (H'b'n &amp; St.P'cras, S.)
Oram, Albert E.


Dempsey, James
Jenkins, Hugh (Putney)
Orme, Stanley


Dewar, Donald
Jenkins, Rt. Hn. Roy (Stechford)
Oswald, Thomas


Diamond, Rt. Hn. John
Johnson, Carol (Lewisham, S.)
Owen, Dr. David (Plymouth, S'tn)


Dickens, James
Johnson, James (K'ston-on-Hull, W.)
Padley, Walter


Doig, Peter
Jones, Dan (Burnley)
Paget, R. T.


Driberg, Tom
Jones, Rt. Hn. Sir Elwyn (W.Ham, S.)
Palmer, Arthur


Dunn, James A.
Jones, J. Idwal (Wrexham)
Pannell, Rt. Hn. Charles


Dunwoody, Mrs. Gwyneth (Exeter)
Jones, T. Alec (Rhondda, West)
Park, Trevor


Dunwoody, Dr. John (F'th &amp; C'b'e)
Judd, Frank
Parker, John (Dagenham)


Eadie, Alex
Kelley, Richard
Parkyn, Brian (Bedford)


Edelman, Maurice
Kenyon, Clifford
Pavitt, Laurence


Edwards, Robert (Bilston)
Kerr, Mrs. Anne (R'ter &amp; Chatham)
Pearson, Arthur (Pontypridd)


Edwards, William (Merioneth)
Kerr, Russell (Feltham)
Peart, Rt. Hn. Fred


Ellis, John
Latham, Arthur
Pentland, Norman


English, Michael
Lawson, George
Perry, Ernest G. (Battersea, S.)


Ennals, David
Leadbitter, Ted
Perry, George H. (Nottingham, S.)


Evans, Albert (Islington, S.W.)
Ledger, Ron
Prentice, Rt. Hn. Reg







Price, Christopher (Perry Barr)
Short, Mrs. Renée (W'hampton, N.E.)
Wallace, George


Price, Thomas (Westhoughton)
Silkin, Rt. Hn. John (Deptford)
Watkins, David (Consett)


price, William (Rugby)
Silverman, Julius
Watkins, Tudor (Brecon &amp; Radnor)


Probert, Arthur
Skeffington, Arthur
Weitzman, David


Randall, Harry
Slater, Joseph
Wellbeloved, James


Rankin, John
Small, William
Wells, William (Walsall, N.)


Rees, Merlyn
Snow, Julian
Whitaker, Ben


Rhodes, Geoffrey
Spriggs, Leslie
White, Mrs. Eirene


Richard, Ivor
Stewart, Rt. Hn. Michael
Whitlock, William


Roberts, Albert (Normanton)
Stonehouse, Rt. Hn. John
Wilkins, W. A.


Roberts, Rt. Hn. Goronwy
Strauss, Rt. Hn. G. R.
Willey, Rt. Hn. Frederick


Roberts, Gwilym (Bedfordshire, S.)
Summerskill, Hn. Dr. Shirley
Williams, Alan (Swansea, W.)


Robertson, John (Paisley)
Swain, Thomas
Williams, Alan Lee (Hornchurch)


Robinson, Rt. Hn. Kenneth (St.P'c'as)
Symonds, J. B.
Williams, Clifford (Abertillery)


Rodgers, William (Stockton)
Taverne, Dick
Willis, Rt. Hn. George


Roebuck, Roy
Thomas, Rt. Hn. George
Wilson, Rt. Hn. Harold (Huyton)


Rogers, George (Kensington, N.)
Thomson, Rt. Hn. George
Wilson, William (Coventry, S.)


Rose, Paul
Thornton, Ernest
Winnick, David


Ross, Rt. Hn. William
Tinn, James
Woodburn, Rt. Hn. A.


Rowlands, E.
Tomney, Frank
Woof, Robert


Ryan, John
Tuck, Raephael
Wyatt, Woodrow


Shaw, Arnold (Ilford, S.)
Urwin, T. W.



Sheldon, Robert
Varley, Eric G.
TELLERS FOR THE NOES:


Shinwell, Rt. Hn. E.
Wainwright, Edwin (Dearne Valley)
Mr. Joseph Harper and


Shore, Rt. Hn. Peter (Stepney)
Walden, Brian (All Saints)
Mr. R. F. H. Dobson.


Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Walker, Harold (Doncaster)

Main Question put forthwith pursuant to Standing Order No. 39 (Amendment on Second or Third reading):—

The House divided: Ayes 304, Noes 244.

Division No. 43.]
AYES
[10.13 p.m.


Abse, Leo
Crossman, Rt. Hn. Richard
Golding, John


Albu, Austen
Dalyell, Tam
Gordon Walker, Rt. Hn. P. C.


Allaun, Frank (Salford, E.)
Darling, Rt. Hn. George
Gray, Dr. Hugh (Yarmouth)


Alldritt, Walter
Davidson, Arthur (Accrington)
Greenwood, Rt. Hn. Anthony


Allen, Scholefield
Davies, E. Hudson (Conway)
Gregory, Arnold


Anderson, Donald
Davies, G. Elfed (Rhondda, E.)
Grey, Charles (Durham)


Archer, Peter (R'wley Regis &amp; Tipt'n)
Davies, Dr. Ernest (Stretford)
Griffiths, Eddie (Brightside)


Armstrong, Ernest
Davies, Rt. Hn. Harold (Leek)
Griffiths, Will (Exchange)


Ashley, Jack
Davies, Ifor (Gower)
Gunter, Rt. Hn. R. J.


Ashton, Joe (Bassetlaw)
Davies, S. O. (Merthyr)
Hamilton, James (Bothwell)


Atkins, Ronald (Preston, N.)
de Freitas, Rt. Hn. Sir Geoffrey
Hamilton, William (Fife, W.)


Atkinson, Norman (Tottenham)
Delargy, H. J.
Hamling, William


Bacon, Rt. Hn. Alice
Dell, Rt. Hn. Edmund
Hannan, William


Bagier, Gordon A. T.
Dempsey, James
Harrison, Walter (Wakefield)


Barnes, Michael
Dewar, Donald
Hart, Rt. Hn. Judith


Barnett, Joel
Diamond, Rt. Hn. John
Haseldine, Norman


Benn, Rt. Hn. Anthony Wedgwood
Dickens, James
Hattersley, Roy



Doig, Peter
Hazell, Bert


Bennett, James (G'gow, Bridgeton)
Driberg, Tom
Healey, Rt. Hn. Denis


Binns, John
Dunn, James A.
Heffer, Eric S.


Bishop, E. S.
Dunwoody, Mrs. Gwyneth (Exeter)
Henig, Stanley


Blackburn, F.
Dunwoody, Dr. John (F'th &amp; C'b'e)
Herbison, Rt. Hn. Margaret


Blenkinsop, Arthur
Eadie, Alex
Hilton, W. S.


Booth, Albert
Edelman, Maurice
Hobden, Dennis


Boston, Terence
Edwards, Robert (Bilston)
Hooley, Frank


Boyden, James
Edwards, William (Merioneth)
Houghton, Rt. Hn. Douglas


Bradley, Tom
Ellis, John
Howarth, Robert (Bolton, E.)


Braine, Bernard
English, Michael
Howie, W.


Brooks, Edwin
Ennals, David
Hoy, Rt. Hn. James


Broughton, Sir Alfred
Evans, Albert (Islington, S.W.)
Huckfield, Leslie


Brown, Hugh D. (G'gow, Provan)
Evans, Fred (Caerphilly)
Hughes, Rt. Hn. Cledwyn (Anglesey)


Buchan, Norman
Evans, Ioan L. (Birm'h'm, Yardley)
Hughes, Hector (Aberdeen, N.)


Buchanan, Richard (G'gow, Sp'burn)
Faulds, Andrew
Hughes, Roy (Newport)


Butler, Herbert (Hackney, C.)
Fernyhough, E.
Hunter, Adam


Butler, Mrs. Joyce (Wood Green)
Finch, Harold
Hynd, John


Callaghan, Rt. Hn. James
Fitch, Alan (Wigan)
Irvine, Rt. Hn. Sir Arthur


Cant, R. B.
Fletcher, Rt. Hn. Sir Eric (Islington, E.)
Jackson, Peter M. (High Peak)


Carmichael, Neil
Fletcher, Raymond (Ilkeston)
Janner, Sir Barnett


Castle, Rt. Hn. Barbara
Fletcher, Ted (Darlington)
Jay, Rt. Hn. Douglas


Chapman, Donald
Foley, Maurice
Jeger, George (Goole)


Coe, Denis
Foot, Michael (Ebbw Vale)
Jeger, Mrs. Lena (H'b'n &amp; St.P'cras, S.)


Coleman, Donald
Forrester, John
Jenkins, Hugh (Putney)


Concannon, J. D.
Fowler, Gerry
Jenkins, Rt. Hn. Roy (Stechford)


Conlan, Bernard
Fraser, John (Norwood)
Johnson, Carol (Lewisham, S.)


Corbet, Mrs. Freda
Freeson, Reginald
Johnson, James (K'ston-on-Hull, W.)


Craddock, George (Bradford, S.)
Galpern, Sir Myer
Jones, Dan (Burnley)


Crawshaw, Richard
Gardner, Tony
Jones, Rt. Hn. Sir Elwyn (W.Ham, S.)


Cronin, John
Garrett, W. E.
Jones, J, Idwal (Wrexham)


Crosland, Rt. Hn. Anthony
Ginsburg, David
Jones, T. Alec (Rhondda, West)




Judd, Frank
Molloy, William
Sheldon, Robert


Kelley, Richard
Morgan, Elystan (Cardiganshire)
Shore, Rt. Hn. Peter (Stepney)


Kenyon, Clifford
Morris, Alfred (Wythenshawe)
Short, Rt. Hn. Edward (N'c'tte-u-Tyne)


Kerr, Mrs. Anne (R'ter &amp; Chatham)
Morris, Charles R. (Openshaw)
Short, Mrs. Renée (W'hampton, N.E.)


Kerr, Russell (Feltham)
Morris, John (Aberavon)
Silkin, Rt. Hn. John (Deptford)


Latham, Arthur
Moyle, Roland
Silverman, Julius


Lawson, George
Mulley, Rt. Hn. Frederick
Skeffington, Arthur


Leadbitter, Ted
Murray, Albert
Slater, Joseph


Ledger, Ron
Neal, Harold
Snow, Julian


Lee, Rt. Hn. Frederick (Newton)
Newens, Stan
Spriggs, Leslie


Lee, Rt. Hn. Jennie (Cannock)
Oakes, Gordon
Stewart, Rt. Hn. Michael


Lee, John (Reading)
Ogden, Eric
Stonehouse, Rt. Hn. John


Lestor, Miss Joan
O'Halloran, Michael
Strauss, Rt. Hn. G. R.


Lever, Rt. Hn. Harold (Cheetham)
O'Malley, Brian
Summerskill, Hn. Dr. Shirley


Lewis, Arthur (W. Ham, N.)
Oram, Albert E.
Swain, Thomas


Lewis, Ron (Carlisle)
Orme, Stanley
Symonds, J. B.


Lipton, Marcus
Oswald, Thomas
Taverns, Dick


Lomas, Kenneth
Owen, Dr. David (Plymouth, S'tn)
Thomas, Rt. Hn. George


Loughlin, Charles
Padley, Walter
Thomson, Rt. Hn. George


Luard, Evan
Paget, R. T.
Thornton, Ernest


Lyon, Alexander W. (York)
Palmer, Arthur
Tinn, James


McBride, Neil
Pannell, Rt. Hn. Charles
Tomney, Frank


McCann, John
Park, Trevor
Tuck, Raphael


MacColl, James
Parker, John (Dagenham)
Urwin, T. W.


MacDermot, Niall
Parkyn, Brian (Bedford)
Varley, Eric G.


Macdonald, A. H.
Pavitt, Laurence
Wainwright, Edwin (Dearne Valley)


McGuire, Michael
Pearson, Arthur (Pontypridd)
Walden, Brian (All Saints)


McKay, Mrs. Margaret
Peart, Rt. Hn. Fred
Walker, Harold (Doncaster)


Mackenzie, Gregor (Rutherglen)
Pentland, Norman
Wallace, George


Mackie, John
Perry, Ernest G. (Battersea, S.)
Watkins, David (Consett)


Mackintosh, John P.
Perry, George H. (Nottingham, S.)
Watkins, Tudor (Brecon &amp; Radnor)


Maclennan, Robert
Prentice, Rt. Hn. Reg
Weitzman, David


MacMillan, Malcolm (Western Isles)
Price, Christopher (Perry Barr)
Wellbeloved, James


McMillan, Tom (Glasgow, C.)
Price, Thomas (Westhoughton)
Wells, William (Walsall, N.)


McNamara, J. Kevin
Price, William (Rugby)
Whitaker, Ben


MacPherson, Malcolm
Probert, Arthur
White, Mrs. Eirene


Mahon, Peter (Preston, S.)
Randall, Harry
Whitlock, William


Mallalieu, E. L. (Brigg)
Rankin, John
Wilkins, W. A.


Mallalieu, J.P.W. (Huddersfiefd, E.)
Rees, Merlyn
Willey, Rt. Hn. Frederick


Manuel, Archie
Rhodes, Geoffrey
Williams, Alan (Swansea, W.)


Mapp, Charles
Richard, Ivor
Williams, Alan Lee (Hornchurch)


Marks, Kenneth
Roberts, Albert (Normanton)
Williams, Clifford (Abertillery)


Marquand, David
Roberts, Rt. Hn. Goronwy
Williams, Mrs. Shirley (Hitchin)


Marsh, Rt. Hn. Richard
Roberts, Gwilym (Bedfordshire, S.)
Willis, Rt. Hn. George


Mason, Rt. Hn. Roy
Robertson, John (Paisley)
Wilson, Rt. Hn. Harold (Huyton)


Maxwell, Robert
Robinson, Rt. Hn. Kenneth (St. P'c'as)
Wilson, William (Coventry, S.)


Mayhew, Christopher
Rodgers, William (Stockton)
Winnick, David


Mellish, Rt. Hn. Robert
Roebuck, Roy
Woodburn, Rt. Hn. A.


Mendelson, John
Rogers, George (Kensington, N.)
Woof, Robert


Mikardo, Ian
Rose, Paul
Wyatt, Woodrow


Millan, Bruce
Ross, Rt. Hn. William



Miller, Dr. M. S.
Rowlands, E.
TELLERS FOR THE AYES:


Milne, Edward (Blyth)
Ryan, John
Mr. Joseph Harper and


Mitchell, R. C. (S'th'pton, Test)
Shaw, Arnold (Ilford, S.)
Mr. R. F. H. Dobson.




NOES


Alison, Michael (Barkston Ash)
Brewis, John
Crouch, David


Allason, James (Hemel Hempstead)
Brinton, Sir Tatton
Crowder, F. P.


Amery, Rt. Hn. Julian
Bromley-Davenport, Lt.-Col. Sir Walter
Cunningham, Sir Knox


Archer, Jeffrey (Louth)
Brown, Sir Edward (Bath)
Dalkeith, Earl of


Astor, John
Bruce-Gardyne, J.
Dance, James


Atkins, Humphrey (M't'n &amp; M'd'n)
Bryan, Paul
Davidson, James (Aberdeenshire, W.)


Awdry, Daniel
Buchanan-Smith, Alick (Angus, N &amp; M)
d'Avigdor-Goldsmid, Sir Henry


Baker, Kenneth (Acton)
Buck, Antony (Colchester)
Dean, Paul


Baker, W H. K. (Banff)
Bullus, Sir Eric
Digby, Simon Wingfield


Balniel, Lord
Burden, F. A.
Dodds-Parker, Douglas


Barber, Rt. Hn. Anthony
Campbell, B. (Oldham, W.)
Doughty, Charles


Batsford, Brian
Campbell, Gordon (Moray &amp; Nairn)
Douglas-Home, Rt. Hn. Sir Alec


Beamish, Col. Sir Tufton
Carlisle, Mark
Drayson, G. B.


Bell, Ronald
Carr, Rt. Hn. Robert
du Cann, Rt. Hn. Edward


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Cary, Sir Robert
Eden, Sir John


Berry, Hn. Anthony
Channon, H. P. G.
Elliot, Capt. Walter (Carshalton)


Bessell, Peter
Chataway, Christopher
Emery, Peter


Biffen, John
Chichester-Clark, R.
Errington, Sir Eric


Biggs-Davison, John
Clark, Henry
Farr, John


Birch, Rt. Hn. Nigel
Clegg, Walter
Fisher, Nigel


Black, Sir Cyril
Cooke, Robert
Fortescue, Tim


Blaker, Peter
Cooper-Key, Sir Neill
Foster, Sir John


Boardman, Tom (Leicester, S.W.)
Cordle, John
Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)


Bossom, Sir Clive
Corfield, F. V.
Fry, Peter


Boyd-Carpenter, Rt. Hn. John
Costain, A. P.
Galbraith, Hn. T. G.


Boyle, Rt. Hn. Sir Edward
Craddock, Sir Beresford (Spelthorne)
Gibson-Watt, David







Gilmour, Ian (Norfolk, C.)
Lubbock, Eric
Rhys Williams, Sir Brandon


Glover, Sir Douglas
McAdden, Sir Stephen
Ridley, Hn. Nicholas


Glyn, Sir Richard
MacArthur, Ian
Ridsdale, Julian


Godber, Rt Hn. J. B.
Maclean, Sir Fitzroy
Rippon, Rt. Hn. Geoffrey


Goodhart, Philip
Macleod, Rt. Hn. Iain
Robson Brown, Sir William


Goodhew, Victor
McMaster, Stanley
Rodgers, Sir John (Sevenoaks)


Gower, Raymond
Macmillan, Maurice (Farnham)
Rossi, Hugh (Hornsey)


Grant, Anthony
McNair-Wilson, Michael
Royle, Anthony


Grant-Ferris, Sir Robert
McNair-Wilson, Patrick (NewForest)
Russell, Sir Ronald


Gresham Cooke, R.
Maddan, Martin
Scott-Hopkins, James


Gurden, Harold
Maginnis, John E.
Sharples, Richard


Hall, John (Wycombe)
Marples, Rt. Hn. Ernest
Shaw, Michaet (Sc'b'gh &amp; Whitby)


Hamilton, Michael (Salisbury)
Marten, Neil
Silvester, Frederick


Harris, Reader (Heston)
Maude, Angus
Smith, Dudley (W'wick &amp; L'mington)


Harrison, Brian (Maldon)
Maudling, Rt. Hn. Reginald
Smith, John (London &amp; W'minster)


Harvey, Sir Arthur Vere
Mawby, Ray
Speed, Keith


Harvie Anderson, Miss
Maxwell-Hyslop, R. J.
Stainton, Keith


Hastings, Stephen
Mills, Peter (Torrington)
Stodart, Anthony


Hawkins, Paul
Mills, Stratton (Belfast, N.)
Stoddart-Scott, Col. Sir M.


Hay, John
Miscampbell, Norman
Summers, Sir Spencer


Heald, Rt. Hn. Sir Lionel
Mitchell, David (Basingstoke)
Tapsell, Peter


Heath, Rt. Hn. Edward
Monro, Hector
Taylor, Sir Charles (Eastbourne)


Heseltine, Michael
Montgomery, Fergus
Taylor, Edward M.(G'gow, Cathcart)


Higgins, Terence L.
More, Jasper
Taylor, Frank (Moss Side)


Hiley, Joseph

Temple, John M.


Hill, J. E. B.
Morgan, Geraint (Denbigh)
Thatcher, Mrs. Margaret


Hogg, Rt. Hn. Quintin
Morgan-Giles, Rear-Adm.
Thorpe, Rt. Hn. Jeremy


Holland, Philip
Morrison, Charles (Devizes)
Tilney, John


Hooson, Emlyn
Mott-Radclyffe, Sir Charles
Turton, Rt. Hn. R. H.


Hordern, Peter
Munro-Lucas-Tooth, Sir Hugh
van Straubenzee, W. R.


Hornby, Richard
Nabarro, Sir Gerald
Vickers, Dame Joan


Howell, David (Guildford)
Neave, Airey
Waddington, David


Hutchison, Michael Clark
Nicholls, Sir Harmar
Wainwright, Richard (Colne Valley)


Iremonger, T. L.
Noble, Rt. Hn. Michael
Walker, Peter (Worcester)


Irvine, Bryant Godman (Rye)
Nott, John
Walker-Smith, Rt. Hn. Sir Derek


Jenkin, Patrick (Woodford)
Onslow, Cranley
Wall, Patrick


Jennings, J. C. (Burton)
Orr, Capt. L. P. S.
Walters, Dennis


Johnson Smith, G. (E. Grinstead)
Orr-Ewing, Sir Ian
Ward, Christopher (Swindon)


Johnston, Russell (Inverness)
Osborn, John (Hallam)
Ward, Dame Irene


Jopling, Michael
Page, Graham (Crosby)
Weatherill, Bernard


Joseph, Rt. Hn. Sir Keith
Page, John (Harrow, W.)
Wells, John (Maidstone)


Kaberry, Sir Donald
Pardoe, John
Whitelaw, Rt. Hn. William


Kerby, Capt. Henry
Pearson, Sir Frank (Clitheroe)
Wiggin, A. W.


Kershaw, Anthony
Peel, John
Williams, Donald (Dudley)


Kimball, Marcus
Percival, Ian
Wilson, Geoffrey (Truro)



Peyton, John
Winstanley Dr. M. P.


Kirk, Peter
Pike, Miss Mervyn
Wolrige-Gordon, Patrick


Kitson, Timothy
Pink, R. Bonner
Wood, Rt. Hn. Richard


Knight, Mrs. Jill
Pounder, Rafton
Woodnutt, Mark


Lambton, Viscount
Powell, Rt. Hn. J. Enoch
Worsley, Marcus


Lancaster, Col. C. G.
Price, David (Eastleigh)
Wright, Esmond


Lane, David
Prior, J. M. L.
Wylie, N. R.


Langford-Holt, Sir John
Pym, Francis
Younger, Hn. George


Lawler, Wallace
Quennell, Miss J. M.



Legge-Bourke, Sir Harry
Rawlinson, Rt. Hn. Sir Peter
TELLERS FOR THE NOES:


Lewis, Kenneth (Rutland)
Rees-Davies, W. R.
Mr. R. W. Elliott and


Lloyd, Rt. Hn. Selwyn (Wirral)
Renton, Rt. Hn. Sir David
Mr. Reginald Eyre.


Longden, Gilbert

Bill accordingly read a Second time and committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That the Proceedings on the Motion relating to Ways and Means may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Ennals.]

Orders of the Day — NATIONAL SUPERANNUATION AND SOCIAL INSURANCE [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to make further provision with respect to national superannuation and social insurance and with respect to benefit under the Ministry of Social Security Act 1966, it is expedient to authorise the payment out of moneys provided by Parliament of—

(1) payments by way of contributions, into the funds out of which benefit is payable under the said Act of the present Session (hereafter referred to as 'the Act'), equal to 18 per cent. of the estimated sums which,


under the Act would have been paid into those funds out of the contributions payable under the Act by employers and employees and other individuals if the Act had not provided for the abatement of contributions relating to certain employments;

(2) any expenses incurred by a Minister of the Crown or government department in carrying the Act or the National Insurance (Industrial Injuries) Act 1965 into effect or with a view to obtaining statistics, except in so far as those expenses are required by either of those Acts to be paid and borne in some other manner (excluding reimbursement from the funds aforesaid);

(3) any expenses incurred by a Minister of the Crown by virtue of provisions of the Act authorising him to exercise, in relation to employments qualifying for pension under certain enactments, any functions conferred on employers by the Act;

(4) any increase attributable to the Act in the sums payable under any other enactment out of moneys so provided.—[Mr. Ennals.]

WAYS AND MEANS

NATIONAL SUPERANNUATION AND SOCIAL INSURANCE

Resolved,
That, for the purposes of any Act of the present Session to make further provision

with respect to national superannuation and social insurance and with respect to benefit under the Ministry of Social Security Act 1966, it is expedient—

(1) to provide for the payment towards the cost of the national health service in Great Britain, out of contributions to be paid in respect of earnings or otherwise under the said Act of the present Session, of sums estimated to be equal—

(a) in the case of contributions to be paid by employees in respect of earnings, to 0·30 per cent. of the earnings;
(b) in the case of contributions to be paid by employers in respect of earnings, to 0·60 per cent. of the earnings;
(c) in the case of contributions to be paid by self-employed persons, to 7 per cent. of the contributions;
(d) in the case of contributions to be paid by other persons who elect to pay them, to 9 per cent. of the contributions;

(2) to authorise the payment into the Consolidated Fund of any sums required by virtue of the said Act of the present Session to be paid into that Fund.—[Mr. Ennals.]

WALES RURAL DEVELOPMENT BOARD

10.27 p.m.

The Secretary of State for Wales (Mr. George Thomas): I beg to move,
That the Wales Rural Development Board Order, 1969, a draft of which was laid before this House on 9th December, be approved.
The Select Committee has passed observations on the Order and before I turn to the substance of the Order perhaps I had better deal with that. First, I should explain that the Select Committee's criticisms are not related to the body of the Order itself but only to the preamble. The Committee considers that this should have stated explicitly that the procedural requirements which are set out in Schedule 5 to the Act had in fact been complied with.
In the memorandum which is an appendix to the Select Committee's Report are set forth the reasons why the Order was drafted as it was—following exactly the precedent of the Northern Pennines Rural Development Board Order which was considered by both the Select Committee and the House last year. But I do not propose to go into those reasons now. Let me, however, at once assure the House that everything the Act required to be done has in fact been done.
Secondly, in view of the Select Committee's Report, having taken the best legal advice available to me, I am satisfied that the matters referred to by the Select Committee in its Report in no way affect the validity of the Order.
The Order follows closely a similar Order which the House approved on 11th July last establishing a Rural Development Board in the North Pennines. That Board is now well established.
The Order for which I seek the House's approval tonight will be a major means of helping to strengthen the economy of Mid Wales. It will enable farmers and landowners in the hills and upland areas to overcome the special problems of farm size—

Mr. Speaker: Order. It is difficult for the right hon. Gentleman to address the House against a background of various

conversations in various parts in and out of the House.

Mr. Thomas: Thank you, Mr. Speaker.
The Order will enable farmers and landowners in the hills and upland areas in particular to overcome the special problems of farm size and to co-ordinate the use of their area so that agriculture and forestry complement each other. The Order gives to the Rural Development Board in Mid Wales power to give financial help for improving or providing communications and public service, for improving and augmenting tourist facilities in farm or forest homes, and for providing caravan or camping sites so that those engaged in farm or forestry may obtain extra income from tourism if they so desire. But the interests of forestry will not override the interests of agriculture. Moreover, farmers who voluntarily give up land for forestry will, subject to the Board's approval, be entitled to grant or annuity.
In the 25 years that it has been my privilege to serve in this House, there has been an unceasing stream of reports on Mid Wales, all referring to the need for a stable and prosperous economy. These reports have stressed the unbalanced farm structure of the area where there are too few holdings which provide a satisfactory living for a full-time farmer and his family. The reports have emphasised the undoubted scope for developing agriculture and forestry in harmony, coupled with the need to diversify economy and improve public services. The Mid Wales Rural Development Board is directed to meet the very needs which these reports have outlined.
The Order has been the subject of a great deal of controversy in Mid Wales in which politicians like the hon. Member for Hereford (Mr. Gibson-Watt), the hon. and learned Member for Montgomery (Mr. Hooson), and, of course, Welsh Nationalist politicians, have all played a part. I have not remained aloof. Neither has my hon. Friend the Member for Cardigan (Mr. Elystan Morgan) who has shown great courage in this matter.
I received at the Welsh Office a deputation of farmers from Cardiganshire and Montgomeryshire and Brecon and Radnorshire and we had a thorough and amicable discussion on the powers of


the Board. I have also met the representatives of the National Farmers' Union from all over Wales.
In addition, I addressed meetings of farmers at Newtown, Montgomeryshire, and in Aberaeron, Cardiganshire. The meeting at Newtown was sponsored by the Country Landowners' Association and was presided over by a much respected former Member of this House, Colonel Beaumont. I had the unusual experience at this public meeting of finding the hon. and learned Member for Montgomery and his prospective Nationalist opponent, both being in the meeting and addressing questions to me. It is, of course, a new feature for hon. Members of this House to attend public meetings addressed by Ministers and to ask questions of them, as both these gentlemen did.

Mr. David Gibson-Watt: The right hon. Gentleman is quite right. Will he follow that out and agree that at that public meeting at Aberaeron a week or so ago his hon. Friend the Member for Cardigan (Mr. Elystan Morgan) was also present?

Mr. Thomas: My hon. Friend is a member of the Government and was speaking on the same platform.

Mr. Emlyn Hooson: Would the right hon. Gentleman agree that the purpose of the only question that I asked was to correct a misstatement of fact, with which the right hon. Gentleman agreed when I corrected it?

Mr. Thomas: The hon. and learned Gentleman is no more helpful tonight than he was on the last occasion. I much appreciated the compliment which both the Welsh Nationalist and the hon. and learned Gentleman paid me by the eagerness with which they hung on my every word. I felt sure, and I still do, that they were there to learn and were not there with any such unworthy purpose as either to embarrass me or to impress their electors. I promised the Newtown people that I would faithfully report to this House the hostility of that particular meeting to the Order now before us. It was a packed meeting and included some people from outside the area which would be affected by this Order, but I acknowledge that there were genuine fears expressed at the meeting, and I

hope to relieve those fears by what I have to say tonight.
At the annual meeting of the Cardiganshire Association of the N.F.U. I answered questions for roughly half an hour, but no one expressed any anxiety concerning the Mid Wales Rural Development Board. That is true, and I would not dare to stand here and say so if it were not.
There are two main worries of farmers in the proposed area for this Board, and I propose to deal with them at once. First, there is anxiety concerning the free sale of land. Second, there is anxiety concerning the Board's powers of compulsory acquisition.
Let me deal with the Board's control over transfers of land. There are 4,270 holdings in the area which were included in the agricultural census at June, 1968. More than half the holdings in the proposed area of the Board are in Cardiganshire, and the Cardiganshire County Council voted by 10 to 1 in favour of the establishment of this Board. The Cardiganshire county branch of the N.F.U. voted by a similar majority—something very near to 10 to 1—in favour of this Board being established.

Mr. Gwynfor Evans: What proportion of the farmers in Cardiganshire who are affected by the Board signed the petition against its being set up?

Mr. Thomas: I am glad to note the hon. Gentleman's interest in this matter, because he did not show it on the Third Reading of the Bill which led to the setting up of this Board. It is impossible to say how many members of the same family signed the petition. It is impossible to give the hon. Gentleman the answer for which he has asked. On more than four-fifths of the holdings the farm business is below the level which would enable us to regard the holdings as commercial units as defined in Section 40(2) of the Act, that is, they cannot provide full time employment for the occupier and at least one other person. Indeed, about half of the holdings concerned do not provide full time employment for the occupier alone. Steep slopes and heavy rainfall—more than 80 inches per annum in the central massif—are characteristic of the area.
It is remarkable that in the face of insufficient acres, poor soil, and other limitations, so many of these people have continued in the hard struggle to obtain a bare subsistence from their holdings. I salute their efforts. Everyone with a knowledge of the area knows that as the years have gone by some have been defeated by the unequal struggle. Sometimes land has been sold to someone farming many miles away who is content to ranch the holding from a distance. This Order aims to help the small farmer to increase the size of his holding and thus to get a decent living for his family.
For this reason, when land comes on the market the Board will be able to consider how best it can contribute to the wellbeing of the area as a whole. There is no problem about getting consent where the land to be sold is already a viable economic holding. Where it is a part-time farm which the owner wishes to sell as such and which the Board sees as continuing to make a valuable contribution to the social and economic life of the area, there should again be no difficulty. But where a person far away wishes to buy the land whereas it would improve the standard of living of an adjoining farm, the Board will obviously be interested. So will the small farmers.
Control over land transfers will in no way affect transfers within the family. There is no interference here with the inalienable right of an owner to transfer his land to his natural heirs or successors. The second point is that no one will be forced to sell; it is entirely the owners' voluntary decision.
If, on rare occasions, the Board feels that it cannot agree to a particular sale, the owner may insist on the Board's buying it at a fair market price. Moreover, the Board cannot refuse consent to the transfer unless the very important conditions set out in the Act, approved without opposition by the House, are met. In any case, where the Board refuses consent there is always open to the smallholder an appeal to the Minister.
I now turn to the question of compulsory acquisition. The Board's powers in this regard are minimal. They are far smaller than those powers enjoyed by nominated Boards like the Gas Board or

the Electricity Board. They are far less than the powers enjoyed by local authorities throughout Wales. In two Sections only in Part III of the Act are these compulsory powers mentioned. The first is in Section 50(7), which deals with land transferred without the requisite consent of the Board. In these cases, the Board is empowered to acquire the land concerned by compulsory purchase. It would not necessarily do so. The circumstances of the contravention would first be carefully considered. The power is there as a simple safeguard against deliberate avoidance of the statutory requirement. Given commonsense, it should never be necessary that this sanction be used.
The other Section where compulsory powers are referred to is Section 51(7). This Section provides that where a Board finds within its area a district where, for example, the farm structure is particularly weak, the Board may, on its own intiative or in response to local demand and in consultation with the people in the district, draw up a voluntary scheme in which all concerned will be willing to participate in creating larger farms or re-shaping agricultural holdings or otherwise developing the rural economy of the district. Such a scheme would be based on agreed transfers and exchanges of land and variation of tenancies and so on.
To be absolutely sure that the scheme has a very large measure of support in the district and will be truly beneficial to it, we require that the scheme must have the approval of both my right hon. Friend the Minister of Agriculture and myself. But we have to recognise that there is the outside possibility of the whole scheme being frustrated by a refusal to participate on the part of a person or persons owning a small but crucial area of land. In these circumstances, the Board would be able to apply to Ministers for permission to use compulsory purchase powers to acquire that relatively small area.
We have given repeated assurances—and I repeat tonight—that this is a reserve power which we hope will never be used but which must obviously be there. Otherwise—hon. Members opposite did not object to this on the North Pennines Order—a scheme which the vast majority of those directly concerned wish


to see carried out may never materialise and the district will be unable to make the progress that the area as a whole needs.
At the public inquiry at Aberstwyth in 1968, we authorised a statement to be made to the effect that in estimating the extent of the opposition to any scheme we should take full account not only of the acreage of land involved but also of the number of persons; and in making the comparison of numbers, public bodies such as the Forestry Commission would be excluded. This statement represents substantial additional safeguards aimed at securing the rights of the minority. The whole purpose of the Order is to help the small farmers in an unstable area.
I am sure that the House will realise from what I have said that these can in no sense be regarded as minatory or excessive powers. They are purely reserve powers incidental to the true purpose of the Board, which is to carry out its work in full consultation with and, so far as possible, with the ready co-operation of the people and organisations of their area.
Let me now deal with the charge of the hon. Member for Hereford (Mr. Gibson-Watt) that it is wrong to proceed with this Order without holding a referendum in the area concerned.

Mr. Gibson-Watt: An inquiry.

Mr. Thomas: We had an inquiry which lasted 44 days. Well before any formal proposal to establish the Board was published, we consulted over 70 local authorities and other interested bodies. We found little doubt about the need for a board in Mid-Wales. The Liberal Party, in its policy statement in 1964, said that Mid Wales would benefit from a rural development board—[Interruption.] I would if I were wrong, but the hon. and learned Member for Montgomery will be able to make his own speech.
When the proposal was published, we received objections which were examined at a public local inquiry presided over by Sir Ben Bowen Thomas, one of our most distinguished public figures in Wales. In his report, following the inquiry, Sir Ben noted that opposition to

the Board had led to an attitude of destructive, not constructive criticism of those provisions of Part III. He proposed certain modifications in the area of the Board and this draft Order incorporates all the modifications which he recommended.
As well as defining the Board's area the Order establishes the Board itself. The chairman designate is Dr. Richard Phillips, an eminent and experienced agriculturalist, and his fellow members are people of undoubted integrity with considerable experience in agriculture and a strong desire to contribute positively to the strengthening of the economy of Mid Wales. These people are not enemies of Mid Wales. The love Mid Wales, they live there, and they see in this proposal the best opportunity which Mid Wales has had this century.
The Order provides for the Board to come into operation one month after the Order is made. We have also provided in Article 4 for certain of the Board's powers not to come into effect for three months. This will give the Board time to get established and to make whatever arrangements it thinks best to enable it to carry out its functions expeditiously when the powers come into force. The Board has already been too long delayed. Much money has been lost to Mid Wales. The urgent decisions that await the Board if the economy of Mid Wales is to be strengthened must be tackled in the near future. As the Welsh Council report on land use strategy in Mid Wales said, we should give the Rural Development Board a chance to show what benefits it can bring to the area. I hope that the House and those involved in Mid Wales will give the Board a fair chance to do just that.

10.50 p.m.

Mr. David Gibson-Watt: We have heard the Secretary of State put the case for the Mid Wales Rural Development Board tonight. I would straight away confess an interest as I have land within the proposed area of the Board.
No subject has raised more controversy in Mid Wales—

The Joint Under-Secretary of State for the Home Department (Mr. Elystan Morgan): Thanks to the hon. Gentleman.

Mr. Gibson-Watt: The hon. Gentleman says that it is thanks to me. I shall come to him later in my speech, if he will allow me.
Nothing has raised more controversy in Mid Wales than the ham-fisted and stubborn way in which the Government have forced this unnecessary and unwanted Board on the farming community of Mid Wales. The matter has been mishandled from the start. During the passage of the Agriculture Act, 1967, my party warned the Government not to disregard the wishes of the people in the area.
The right hon. Gentleman has complained tonight that his political opponents have been making political capital out of the matter. But in the debates on the 1967 Act my right hon. Friend the Member for Grantham (Mr. Godber) and a number of my hon. Friends voiced their fears about the Measure without actually voting against it. My right hon. Friend said on Second Reading of the original Bill:
It is, however, the power in Clause 45(7) for the compulsory acquisition of land which particularly alarms me. We are opposed to this power. We shall want to know a lot more about how it will be used and what will happen to land that is so acquired.
A little later he said:
… and Parliament should be very grudging in giving power of this kind."—[OFFICIAL REPORT, 30th November, 1965; Vol. 721, c. 1267–8.]
I would also point to the activities or non-political activities of the hon. Member for Carmarthen (Mr. Gwynfor Evans), who at as late a date as 16th October, 1967, said when speaking to the Carmarthen branch of the National Farmers Union—[Interruption.]—I have the OFFICIAL REPORT if the Leader of the House wishes what I have just said to be checked. I hear him asking for it to be checked. I am not in the habit of misquoting.
The hon. Member for Carmarthen was reported in the Western Mail as saying at Carmarthen:
Don't try and kill the Rural Development Board.
So he was prepared to give it a chance at that stage. It was only when the Mid Wales farmers from all five counties rose up in their wrath that we in the Conservative Party asked the Government to cancel the Board. We then said—I said

it on behalf of my party—that on our return to power we would do away with it.
Then followed the 1968 annual general meeting of the Farmers' Union of Wales which I was honoured to attend. I was very glad that the right hon. Gentleman followed me a year later, when he tried to sell his case to the Farmers' Union of Wales.

Mr. George Thomas: The hon. Gentleman said that if the Conservatives were returned they would do away with the Board. Does that also apply to the Northern Pennines Rural Development Board? Is it the policy of the party opposite?

Mr. Gibson-Watt: I was not aware that we were discussing the Pennines Board. We have come here to oppose the Mid Wales Rural Development Board Order because the people of Mid Wales do not want it. In my speech I shall explain why they do not. What people do in the Pennines does not matter here tonight—that is their business.

The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): Oh!

Mr. Gibson-Watt: Yes. The Lord President of the Council lives rather nearer to the Pennines than I do. No doubt he knows more about the Pennines than I do, but, with respect, I know a great deal more than he does about Wales.
In October, 1969, we had a large meeting, which included not only members of my party but also of the Liberal Party and of the Welsh National Party, at Aberaeron, where we had about two-and-a-half times as many people as the right hon. Gentleman had when he went to Aberaeron only a week or so ago to address a meeting of farmers and to plead his case. Therefore, I say to him that, whatever the result may be in the House tonight, he and his hon. Friends have already lost the debate in Mid Wales. He should be frank and admit it.
The reasons for setting up the Board are set out in Section 45(2), (3) and (4) and Section 47(1) of the Agriculture Act, 1967. In short, there are six. First, there are special difficulties in forming commercial farm units in the area requiring the full-time services of two men;


secondly, there is a need for an overall programme for allotting land between agriculture and forestry; thirdly, amenities need to be safeguarded; fourthly, money is needed to improve roads and public transport; fifthly, money is needed to improve the supply of gas, electricity and water; sixth, money is needed for the improvement of accommodation for tourists. There is not much disagreement that all this is in the Act.
Of course, there are special difficulties with poorish land, but why must every farm have two full-time men to be a commercial unit? No one has yet answered that. Amalgamations are already taking place without the Board. Secondly, it is well known to the House that over the years some people in Mid Wales have been distrustful of any Government's programme for taking land for forestry and they do not want another Government agency which would reinforce that process.
Thirdly, in relation to amenities, the Countryside Commission was set up only a few months ago. Thanks to the activities of my hon. Friends and myself and of the hon. and learned Member for Montgomery (Mr. Hooson) and of the hon. Member for Carmarthen (Mr. Gwynfor Evans), we now have a Welsh Committee of the Commission which we would never have had if the Government had had their way. Amenity is that Committee's special responsibility and it should not be necessary for it to be looked after by this extra Board.
Fourthly, on the question of money for roads, the Agricultural Roads Act, 1955, passed by a Conservative Government, was a huge success in this area. The Government should look at this matter again because these roads need a good deal of maintenance and money. After all, the county councils are the road authorities and we therefore do not need another board to deal with them.
Fifthly, the Aberystwyth inquiry found that there was adequate electricity, short of three-phase electricity, and plenty of water as well. Sixth, certainly in Mid Wales, we need more hotel rooms with lavatories, but is this not the job of the Tourist Board? Why do we need a rural development board to help over that?
On each one of these counts, I knock down the purpose of the Board in Mid Wales. These are the feelings of many of

the people in the area. The right hon. Gentleman has been sold a puppy. He has taken over the Board from his predecessor and has had every opportunity since then to know the intense opposition in Montgomeryshire, Cardiganshire, Breconshire and Radnorshire, but has been for some reason forced to carry on with it. The inquiry which took place at Aberystwyth at great public cost—£2,600—was only an inquiry into boundaries; not whether the Board was wanted or not. Literally hundreds of objectors turned up, and the Secretary of State must be aware of the bitter opposition there is to a nominated board, whose Chairman said in April 1968—

Mr. George Thomas: Will the hon. Member quote what he said afterwards?

Mr. Gibson-Watt: That would be a very great deal, because it was a long speech explaining away his words. I ask him to consider whether or not the remarks of the Chairman of the Board were helpful to the cause. This is one of the reasons why I say that the matter was handled in a ham-fisted way. I have a high opinion of Sir Richard Phillips, but I think he let his case down when he said that for the first time the Wales Rural Development Board, when it comes to power
will put a nail in the coffin of the right of owners to sell land on the open market.
Can he be surprised that the people in that area are not very keen about the Board?

Mr. Elystan Morgan: Will the hon. Member accept from me that my constituent used that phrase in the context of a speech in which he was dealing with the tyranny of landlordism and made very clear that this Board would stand between the small farmer who needed land and the big farmer who by the power of the purse would be able to buy it?

Mr. Gibson-Watt: The hon. Gentleman refers to "the tyranny of landlordism". He lives in the 19th century. That may well have been true then, but it is certainly not true today. No doubt the hon. Member for Cardigan will catch your eye, Mr. Speaker, and be able to speak later.
The Secretary of State received a deputation from the Farmers' Union of Wales in November last, representing 1,204


farmers in Cardiganshire. There were also 570 from Brecon and Radnor and 1,100 from Montgomeryshire—at least 3,000 signatures. The Secretary of State admitted a few moments ago that there were 4,270 holdings in the area. The right hon. Gentleman knows that this is an area where there are multiple holdings. Therefore, the figures I have given are very much better than they appear to be. In my view, over 80 per cent. of farmers in the area oppose the Board.
Are the Government deaf; have they no feeling for the people of the countryside? The right hon. Gentleman should be able to hear this voice. He should know what these people are thinking. Have the Government forgotten the words of the Leader of the House when he was Minister of Agriculture and told the Brecon and Radnor Farmers' Union members:
We have no wish to dragoon the industry. We cannot ruthlessly impose any system.
That is exactly what the Government are doing.
Last week, I wrote to the Secretary of State an open letter asking him, in view of the continued opposition to the Board, to hold an inquiry—not a referendum. I did not ask for a referendum; he knows that. I asked for a proper inquiry to find whether or not the Board was wanted by those upon whom it is to be foisted. In his answer to me he said:
I do not think anyone who attended the long and exhaustive public inquiry at Aberystywyth in 1968 could reasonably claim that its scope was strictly limited to a hearing of objections to boundaries of the area then proposed by the Board.
It may not have been restricted, but the terms of reference were not to decide whether or not the Board should be there. I ask at this late hour that the right hon. Gentleman should reconsider this. In my view, successive Ministers at the Welsh Office have been over-persuaded by certain elements in the Ministry of Agriculture. They are the people who have hatched this out. Anyone who knows anything about Mid Wales knows this to be the fact. They were the founders of the Board.
With great respect, I blame the Secretary of State, who has responsibility for agriculture in Wales, for listening to the Ministry of Agriculture rather than listen-

ing to the people of Mid Wales. That is why I ask for the inquiry.
A few months ago, during Question Time, the right hon. Gentleman accused me of having a thick skin. I say to him tonight that if he brings in this Order quite regardless of the wishes of the vast majority of the people of the area, I shall assume that he has a hide like a rhinocerous. It would not be a good thing for him in Mid Wales to be considered as Rhino Thomas. That would not do at all. I ask the right hon. Gentleman to reconsider this. Of course, there is politics in this. We all know this. [HON. MEMBERS: "Hear, hear."] Indeed there is, on both sides. The point is that the gods of Socialism are being appeased by the Order. Consider that one.
Therefore, I say one final thing. I give warning now—what I say may shock some hon. Members—to anyone who takes a job with the Mid Wales Rural Development Board that it is still the policy of my party to do away with that board when we come into office. Do not let them complain later that they have not been warned.
Meanwhile, I ask any hon. Member who has a love and an understanding—[An. HON. MEMBER: "Blackmail."] It is not blackmail. It is a clear warning to the party opposite not to go ahead with the fatuous and pointless Order which is so disliked. I ask any hon. Member who has a love and an understanding of the people of Mid Wales to join my right hon. and hon. Friends in the Lobby to oppose the Order.

11.7 p.m.

Mr. Tudor Watkins: I shall join the Government in the Lobby tonight because I have a love for the people of Mid Wales. To the party which the hon. Member for Hereford (Mr. Gibson-Watt) represents on the Front Bench opposite, I must pay this tribute. Time and again, we had White Papers in which the previous Government quoted specific instances in which, they said, something must be done for this part of Mid Wales. I used to get up in the House and say that unless something was done we might as well have an electric fence right round it to stop anybody going near.
Before the war, there was depression in that area, like any other area. Small


farmers in particular existed rather than lived. What kept them together was their family life, their religion, their culture and what they were trying to do in the markets at that time. Let us not forget that aspect of it.
After Tom Williams' Act of Parliament, there was a complete change in the countryside. The Mid Wales Investigation Report advised the Minister of Agriculture at that time that the Government should do something about these things. The 1953 White Paper on Rural Wales said that
action needs to be taken to help rural areas of Wales to achieve a more stable economy and greater prosperity.
The Government said that they must consider
how best they can help forward any reorganisation of farm units that may be needed.
I refer to the Mid-Wales Report on this. Let us examine it and let us look at Radnorshire in particular. Of the eight parishes in Radnorshire, it said that 212 farm holdings had been abandoned in a period of 50 years but that 18 of those had been abandoned during the last five years, some of them in the very parish from which the hon. Member for Hereford comes.
The Report stated that of 500 occupiers in Radnorshire, only eight were under the age of 30—that was rural depopulation coming through—and 50 were over the age of 70. Because of that, the Government of the time did a great job of work. What they recommended was development of viable farms, coupled with forestry. That was in 1956. I am glad it was recommended. The hon. Gentleman the Member for Hereford said a good job of work was done on rural roads under the Act of Parliament because there had been consultations with him. I venture to suggest that it was because there were consultations with me and not with the hon. Gentleman.

Mr. Gibson-Watt: With great respect, that Measure was brought in by a Conservative Government.

Mr. Watkins: Certainly. The Conservatives could not have got it through if they had not been in Government.
The object of the Board is to draw up a programme of action—in co-operation with those concerned: I admit that

right away. At the same time it is to improve public services, which is a very costly thing, and communications. I hope that will be better done than has been done in all respects by the county council. Radnor County Council, of which the hon. Member was a member, did not always link up the last farm in an area with a road; the road always stopped at the last farm but one. He knows that.
Another aspect of the Board's work will be improvement of tourist accommodation, such as caravans and tents. To that extent, £500,000 a year is to be spent. If I may, I would compliment my right hon. Friend upon what he said in explaining this Order. But what did the hon. Member for Hereford say at that meeting? He said,
Hill people, like ourselves, prefer freedom to money.
A very important statement. So I take it that members of the party opposite think they ought not to take advantage of the £500,000 a year.
There are some people in Cardiganshire, I know, who are waiting for this Order to go through so that they can get support for their improvement schemes. Let us, on the other hand, examine the line up of opposition.
The public local inquiry was a good one, and there was a good report from it, but, with all due respect to the hon. and learned Member for Montgomery (Mr. Hooson), I say this about it: it was a wonderful course for prospective officers and candidates of the Liberal Party. The hon. and learned Gentleman will not deny that. If he looks at the evidence he will see that Mr. Elwyn Thomas did a good job for the Liberal Party.
Let us have a look at the opposition. What did the hon. Member for Hereford say in the Welsh Grand Committee on 3rd April, 1968? He said:
The setting up of the Board has been publicly opposed by county councils, by rural district councils.… "—[OFFICIAL REPORT, Welsh Grand Committee, 3rd April, 1968; c. 17.]
And so on. But only five authorities wanted their parts to be excluded. Only five. Carmarthenshire was the only county council. I think that council got away with it very well, perhaps because of the support of the hon. Mem-


ber for Carmarthen (Mr. Gwynfor Evans). But it got away with it. There were reasons for that, of course.
Breconshire approved and had a very good meeting where the questions were exceedingly good. Breconshire agreed to support the Board. Cardiganshire has been consistent in support all along, and I pay tribute to what the Secretary of State and my hon. Friend the Member for Cardigan (Mr. Elystan Morgan) have done all along, and if anybody has to be careful about the next General Election it is my hon. Friend who should be. Radnorshire, of whose county council the hon. Member for Hereford was a member, never said a word against the Board. Not a word. Why? Because there they know that the Board will not interfere with planning, or the roads and highways, and so the people there will work in co-operation with the Board.
Nationally, the National Farmers' Union supports the Order; the Welsh Committee of the Union supports it. There are some individuals who do not agree, but if there had been no farmers in Wales there might have been no opposition at all. As for those protest meetings, they were an anti-Labour Government platform for the F.U.W. I do not compliment them, because I have heard them using their talents for better purposes than this.
A constituent in Llanwrgyd Wells asked me recently, "What will happen to my little holding of 4 acres; my husband is working on the road?" My constituent seemed to think that it will be taken away once the Order goes through. I said, "That is pure rubbish; that is the propaganda behind the scenes." Some people seem to think that their cottages and gardens will go. With all due respect, hon. Gentlemen have known this.
I will not quote what the Welsh Council has said about land use strategy, but the Welsh Farm News in its last edition before it went out of circulation also supported. I am a member of a local authority, and rural district councils and county councils have greater powers than this Board.
Another bogey is that family farms will be broken up and sons will go from them; but this is not so. I am glad that

already the Secretary of State and the headquarters of the Board have been operative. I did my best with the then Minister of Agriculture to get the H.Q. in the clear air of Llandrindod Wells instead of the sea air, but Aberystwyth was chosen.
Criticism has been made of members of the Board. I do not say that hon. Gentlemen opposite have used such a phrase, but they were present at the meeting when the phrase was used—"If they take a position on the Board, they are outcasts in their own country." Two of my constituents are on the Board, a landowner, a very respected gentleman, and a hill farmer, both of whom are known to the three hon. Gentlemen opposite. I am sure that they would have appointed those two constituents to the Board if they had had the chance.
I am glad that we shall be told how many staff there will be on the Board, and I compliment those responsible for the question and answer document that was circulated to the farmers.
Will whoever winds up for the Opposition say what will be done with all the boards set up under the 1947 Act?

11.18 p.m.

Mr. Emlyn Hooson: The hon. Member for Brecon and Radnor (Mr. Tudor Watkins) underestimates the intelligence and the reading of the people of Mid-Wales if he thinks they have been influenced in their attitude towards the Board by the kind of gossip which he related. To proceed with the Order is to impose a board on the farmers of Mid-Wales against their will. This is an entirely undemocratic process process. Very few want the Board, and the vast majority have petitioned against it.
In my constituency, the National Farmers' Union, the Country Landowners' Association, the Farmers' Union of Wales and the three farming unions are all against it, but the Government seem to be determined to carry on, regardless of the views or wishes of the people who are most affected.
In my experience as a Member of Parliament, I have never known such spontaneous opposition to a proposal as there is to this one. On Second Reading of the Agriculture Bill on 6th May, 1966, the then Minister of Agricul-


ture stated that he wished to set up one or two boards in certain areas, but had made no decision where they should be. The Joint Under-Secretary of State for the Home Department, the hon. Member for Cardigan (Mr. Elystan Morgan), showed great enthusiasm for the proposal in his maiden speech and expressed the hope that a board would soon be established in Wales. I do not think that he has deviated from that view.
No area was then designated, but proposals to establish such a board were contained in a few Clauses of a 75-Clause Measure which covered many other subjects. Consequently, these proposals received little attention, in the Committee upstairs, of which I was not a Member, on Report and on Second and Third Readings. Nobody appreciated to the full the revolutionary nature of the proposals contained in those few Clauses.
It has been suggested that opposition to this proposal was deliberately stirred up, but that is not true. This is a classic case of the people instinctively feeling that the establishment of this type of Board could be dangerous. I willingly admit that this is a case of the people altering the politicians rather than the reverse occuring.
Many of those who oppose the establishment of this Board, including myself, appreciate that advantages could result from its establishment, but a vital objection arises because of the powers that the Board will have to control the sale of all agricultural land within its area. Few people outside yet appreciate that before any agricultural land can be sold in the area of the Rural Development Board, the Board's consent must be obtained.
The Chairman Designate, the Minister and many others, including the Secretary of State, have tried to assuage farmers' fears by saying that the power of restricting sale will rarely be used. But farmers bear in mind what the Minister said on Second Reading; that the boards
… will have several specific powers, though these are no wider than is necessary to enable them to help make the break-through to real economic progress in these areas".—[OFFCIAL REPORT, 6th May, 1966; Vol. 727. c. 2028.]
Farmers are not so worried that the Board will immediately use its wide powers, but fear that it will do so in the future.
If these powers are unnecessary, why take them? No Minister can bind his successor, and the present Government cannot give any assurance that Governments in the future will not encourage the Board to use its wide powers to change the whole agricultural pattern of Mid-Wales. The powers are there to have a policy of wholesale amalgamations or to transform much agricultural land to forestry use. After all, on Second Reading the Minister said that the various boards would be particularly concerned with the co-ordination of agriculture and forestry.
Some of those in favour of the proposal, including the Joint Under-Secretary of State for the Home Department, have made the most misleading comparisons between Mid-Wales and the Highland and Islands of Scotland and have referred to the powers of the Highlands and Islands Development Board. The Secretary of State did the same when he suggested that this Rural Development Board was something like that which the Liberals advocated in 1964. He knows perfectly well that the Liberal proposal was for a rural development board to develop industry and to expand existing towns in Mid-Wales and would have included none of the control over agricultural land that the proposed Board will have.
I have with me the Act which established the Highlands and Islands Development Board. Hon. Gentlemen opposite, and particularly the Joint Under-Secretary of State for the Home Department, know that that body has no control over the sale of land. Its powers are much more widely geared to enable it to develop rural industries in its area, and to make a comparison between that Board and the proposed Board is entirely and deliberately misleading.

Mr. Elystan Morgan: The comparison referred only to the question of compulsory purchase which, in the case of the Scottish Board, is completely untrammelled. Would the hon. and learned Gentleman agree that in the 9 million acres—almost twice the size of Wales—covered by the Highlands and Islands Development Board there are far more small farms than are included in the area of the proposed Board?

Mr. Hooson: Mid Wales is largely made up of owner-occupiers. Families


have struggled for generations to free themselves from the control of landlordism and to own their own land. This has largely been accomplished. The few remaining estates are small and generally well-run, with their owners easily accessible to their tenants. The one large estate run through an agent who lives away from Montgomeryshire is, oddly enough, the one estate excluded by the inspector following the inquiry. That is the Wynnstay estate. But no one can say that it is better run than, say, the Vaynor estate at Berriew, which is not excluded.
The farmers of Mid Wales object to a new form of landlordism, which is what the Rural Development Board is. They have emerged, after generations of struggle, from one form of landlordism only to find themselves with a new form of it. The Highlands of Scotland, on the other hand, are controlled mainly in large sporting estates whose owners often do not live there.
In his maiden speech, the hon. Member for Caithness and Sutherland (Mr. Maclennan) said, in the Second Reading debate on the Agriculture Bill:
…for too long has that part of the world been the private preserve of too few, for interests not connected with the well-being of those who live there the year round.
That is to be contrasted with what the hon. Member for Cardigan said of Mid Wales in the same debate:
These small farmers in my constituency will not remain as labourers on the land they once owned."—[OFFICIAL REPORT, 6th May, 1966; Vol. 727, cc. 2087 and 2053.]
Yet one of the main purposes of the Board is to encourage farm amalgamations to form what are regarded by the powers that be as economic units where 600 standard man days are a minimum. Necessarily, this means that, if we are to have an employer and an employee working on a farm, many small farmers will have to become labourers in order to achieve this objective.
The power of controlling the sale of land is precisely a means of achieving this objective. The Secretary of State spelled that out this evening. How can the hon. Member for Cardigan say that farmers in his constituency will not be prepared to become labourers on the land that they once owned?

Mr. Elystan Morgan: I ask the hon. and learned Gentleman to withdraw that allegation. My statement was made in the context of S.E.T. In the context in which he has now misquoted it, it is thoroughly misleading, to say the least.

Mr. Hooson: I never misquote people. I have quoted from the hon. Gentleman's maiden speech in the course of the Second Reading debate on the Agriculture Bill. It had nothing to do with S.E.T. Indeed, it was before S.E.T. was ever proposed.
There are few farmers in Mid Wales—

Mr. Robert Maclennan: Whether or not my hon. Friend the Member for Cardigan (Mr. Elystan Morgan) was referring to S.E.T., the hon. and learned Gentleman has his facts wrong. The S.E.T. issue was a live one at that time. I also referred to it.

Mr. Hooson: I have the OFFICIAL REPORT here, if the hon. Gentleman wishes to check his own speech—

Hon. Members: Withdraw.

Mr. Deputy Speaker: (Mr. Harry Gourlay): Order. Perhaps the hon. and learned Gentleman may be allowed to continue his speech.

Mr. Hooson: There are few farmers in Mid Wales who can properly be described as large farmers in the sense that the term is understood in England. We are a closely knit farming community of people who, above all else, value independence and a way of life. The cultural heritage of Wales is bound up with this way of life, and into the farmers' reckoning come more than the mere economic considerations which seem solely to concern the Government and the Agriculture Department. If a young man wants to farm and is prepared to take on a small farm with a relatively poor economic return, why should he not do so? What right have the Government to stop him or to discourage him? If he would be happier doing this than earning far more as an employee elsewhere, what is there that is wrong with that?
The people of Mid Wales are primarily concerned with the question of their freedom and independence. They see the Board as a real threat to this. They know


full well that these powers will be exercised very gingerly to start with, but that if the Board decided to use its full powers in a few years' time, it could cause havoc in the social and cultural life of Mid Wales, and there would be no democratic control over it. Nothing the Secretary of State has said could prevent the Board from using these powers in the years to come.
Whatever other objections there are to the Board, it is this central objection which is vital. Even people who do not like the idea of the Board would cooperate if this power to control the sale of land were dropped. The right hon. Gentleman and hon. Members have asked farmers to co-operate. If this provision were dropped, there might be some question of co-operation, but while this power over the sale of land remains with the Board, no possible co-operation can be expected.
I intend to vote against the Board and in doing so I shall be expressing the views of those who have the wholehearted support of the majority of the agricultural population of Mid Wales.

11.32 p.m.

Mr. Gwynfor Evans: I oppose the Board, because in the course of the discussion of its powers and purposes it has become clear that it is not a rural development board. Its powers of development are very restricted. When in the debate in the Welsh Grand Committee on agriculture I asked what powers the Board would have to assist in a manner in which assistance was not available from any other source, apart from tourism, no answer was given to me. Perhaps we may have an answer to that question tonight.
What has been new in the Government's agricultural policy and what is most relevant to this matter is the Government's decision to speed up the amalgamation of farms. The White Paper has said this quite clearly. It said that many changes in size and lay-out of farms were already taking place on private initiative and that amalgamations were already going on, but that the Government were not satisfied with the speed of amalgamations and hoped that the process would continue at a greater speed with the incentives now proposed. The Government, therefore, not only wanted the amalgamations to proceed; they

wanted them to proceed more quickly, and the incentives were designed for that purpose.
But one cannot amalgamate farms without getting rid of farms and the farms to be got rid of are the small farms. They are considered by the Government not to be commercial units; and when the Government say that they hope that farms will be amalgamated at a greater speed, what they are saying is that they want to squeeze out the small farms at a greater speed. The Board is regarded by people in Mid Wales as an agency to achieve this purpose.
The outstanding feature of the Board's character is the power being given to it to do just this. Inside its area the Board will have power to prevent a land owner from selling or assigning his farm, whatever its size, without the consent of the Board and the Board may refuse that consent if it thinks that the farm can be disposed of for a purpose affecting amalgamation or coordinating the use of the land for forestry and agriculture. That has an ominous sound in Welsh ears, because of the struggle that we had in the past with the Forestry Commission, which has immense resources in the matter and is given two places on the Board.
This is my central point. A Welshman who cherishes the Welsh way of life must oppose this institution with all his strength because it is an institution which will lead to greater depopulation. The main social evil in Wales, particularly rural Wales, is depopulation. Seven of our 13 countries have smaller populations than in 1921. This is not true of even one of the 39 counties of England.
The Welsh rural society is the main backbone of our way of life, of our language, and of our national culture. This is the reason—and it is a social reason—why conditions should be created in which small farms can flourish. The people who farm them and the people who depend upon them—the ancillary industries, the professions and services—are the strongest bastion of our national tradition. Agriculture, therefore, for us is far more important proportionately than it is in England.
For the small farmer the issue is an economic one. But for other citizens—and we must all be concerned about this —agriculture's place is a major social issue. The question that it raises now


and the question that the Board raises is: what kind of society do we want? Part of the national tragedy in Wales is that we can only raise the question. We cannot answer the question. We cannot decide and act according to the way we think the matter should be dealt with.
Today, even without the assistance of the Rural Development Board, financial pressures arising from Government policy are forcing people off the land. When the Rural Development Board starts buying up land or taking over farms it will find itself in the company of industrial and commercial ventures and syndicates of all kinds which are doing the same thing. It is becoming more and more difficult for this reason for young blood to get into this industry. It will be almost impossible before long for a young man, who has not got a rich father with a fat bank balance or a father who owns a farm, to get into farming. I think that a Government policy which encourages this process and encourages larger farms which need greater capital is a strange kind of Socialism.
I agree with the statement made in the debate on Second Reading of the Agriculture Bill:
Any suspicion of a policy of squeezing the small farmers into amalgamation would eat like acid into the framework of a community like Cardiganshire."—[OFFICIAL REPORT, 6th May. 1966; Vol. 727, c. 2053.]
The rural community referred to there was Cardigan, and the words were those of the hon. Member for Cardigan (Mr. Elystan Morgan).
The vast majority of the farmers of that county, like the whole of the area affected by the Board, still think that way, and they have mounted a powerful opposition to the Board. The people most affected by the Board are the people most strongly opposed to it.
How often in Wales have we suffered the imposition of policies and institutions against the clearly expressed will of the Welsh people. On the other hand, policies and institutions such as the Countryside Commission, for which the people have called, have often been denied them.
This is the mark of a bureaucratic way of government, not a democratic way of government. A bureaucratic Govern-

ment is one which rides roughshod over the will of the people, as the Government are prepared to do in this case. This kind of Government is becoming increasingly intolerable to the people of Wales. The only remedy is to put the government of Wales in the hands of the Welsh people.

11.39 p.m.

Mr. George Thomas: I have rarely listened to a debate in which there has been a more "phoney" opposition than I have heard tonight. We have had to endure a lot of humbug from hon. Members who debated this for more than two and a half days in Committee and never voted against it. We have had the humbug of hon. Members talking as though all along they were the ones who thought that this was ill-advised for Wales.
I respect the concern of the hon. Member for Carmarthen (Mr. Gwynfor Evans) for a Welsh Parliament, but his concern for small farmers is difficult to understand in view of his arguments. We have lost 10,000 small farmers from Wales. They have been amalgamated with the big farmers. Small farmers have not so far been helped to join together, and it is these people who will have an opportunity to benefit from these proposals.
The hon. Gentleman asked what other powers the Board would have apart from helping tourism. It will be able to buy farms by agreement, spend money on improving them, and then make them available at a fair price. It may accept a loss in so doing. Also, it will be able to assist in improving public services. The hon. Gentleman acknowledged that developments will be necessary in respect of the supply of electricity. The Board will be able to help with that, and with telephones, farm roads, and so on.
It is this Government who have arrested depopulation in Mid-Wales. This problem has existed for a century, and these proposals are intended to strengthen the economy of those who are there now. Our weak farming structure has meant that young people could see no future in Mid-Wales. That is why they left the area. We are strengthening the economy so that the young people will stay in Mid-Wales.
I have much stronger words than usual to say to the hon. Member for Hereford


(Mr. Gibson-Watt), because his speech was quite out of character. He said that the provision of amenities and improvements to the area should be left to the tourist board.

Mr. Gibson-Watt: There are two separate issues here. One is amenity, and the other is tourism. The first should be left to the Countryside Commission, and the second to the tourist board.

Mr. Thomas: The hon. Gentleman referred to the tourist board and asked why this should not be left to that board. As the hon. Gentleman probably knows, though he may have overlooked it, the tourist board is not concerned with farmhouse accommodation. This board will be concerned with farmhouses with fewer than 10 rooms, and the hon. Gentleman will appreciate that there are not many smallholdings with more than that number of rooms. The hon. Gentleman probably has more than 10 rooms in his farmhouse, but the people about whom we are talking do not, and the board can fill this gap.
The hon. Gentleman said that the Conservatives do not like this proposal, and that his right hon. Friend the Member for Grantham (Mr. Godber) expressed some anxieties during the debate. I read that debate with great care, and it is quite clear that the right hon. Gentleman was satisfied with the answers that he received or he would have cast his vote against the proposal. The right hon. Gentleman was a member of the Committee which considered the Bill and if he was not satisfied he had every opportunity to vote against the Measure.

Mr. J. B. Godber: My hon. Friend the Member for Hereford (Mr. Gibson-Watt) quoted what I said. It is quite clear to the House, and I do not withdraw one word of it. We were deeply concerned about the possible risks that could flow from this legislation. We said that we were not opposed to the boards being set up where they had the support of the community, but that we did not want them imposed on those who did not want them. That was our point.
We asked for certain specific assurances, which we received from the then Parliamentary Secretary, the right hon. Member for Edinburgh, Leith (Mr. Hoy).

We asked particularly about public inquiries, and the hon. Gentleman said at col. 1044 in Standing Committee A on 17th November, 1966, that "there would be powers for public inquiries at which it would be possible to consider not only where the boundaries should be"—

Hon. Members: Speech.

Mr. Godber: I have been challenged, and I am entitled to come back—"but for there to be full discussion as to the special needs". My hon. Friend said that an opportunity had been given for the inquiry, and that is the gravamen of my case.

Mr. Thomas: No one can say that I did not give the right hon. Gentleman full opportunity to discuss his anxieties. On 15th November, in Standing Committee A, the right hon. Gentleman told the Committee:
When the Minister replies I hope he will tell us a little more of the forestry aspect and give an assurance that this will include not only the Forestry Commission but private forestry owners and those who play an important part in forestry and that they will be brought fully into the picture in the membership of the Board.—[OFFICIAL REPORT, Standing Committee A, 15th November, 1966; c. 1039.]
The hon. Gentleman has been very keen to have these interests represented. The hon. Member for Hereford said earlier that hon. Members opposite were against this Order because the farmers were against it. That is what the hon. Gentleman said. Will he change his mind if the farmers change theirs? Will he say, "I am now in favour of it"? Is that how he proposes to do business if he has a chance to be a Minister? Is he going to say to himself "In the Pennines one thing; in Wales another thing"?

Mr. Gibson-Watt: Mr. Gibson-Watt rose—

Mr. Thomas: I cannot give way at the moment.

Mr. Michael Jopling: The right hon. Gentleman cannot take it.

Mr. Thomas: I am giving it at the moment.
The hon. Gentleman said that we had lost the battle for Mid-Wales and then made some personal remarks about me. The hon. Gentleman knows that the test of this issue is when the Welsh farmers


have seen what the board can do. He who laughs last laughs longest. The hon. Gentleman might remember that, because in years to come those who have tried to hold back this £500.000 per year on development for Mid-Wales will live to regret it.
My hon. Friend the Member for Brecon and Radnor (Mr. Tudor Watkins)—

Mr. Gibson-Watt: Mr. Gibson-Watt rose—

Mr. Thomas: I have not got much time in which to reply.
My hon. Friend the Member for Brecon and Radnor is, if I may say so, a greater authority on Mid-Wales than the hon. Member for Hereford, although I know that he was on the Radnorshire County Council which did not oppose setting up this board. The hon. and learned Member for Montgomery (Mr. Hooson), about whom, also, I shall have something to say, made a sneering reference to my hon. Friend the Member for Brecon and Radnor for the stories that he brought to the House. It is the underhand way in which supporters of hon. Members opposite have been spreading stories, to cause false alarm amongst the farmers that they will be losing their homes, that has been responsible for a lot of unjustified fear. Otherwise, the anxiety would no more have been felt in Wales than it is in the Pennines.
I come to the hon. Gentleman's threat to the board-designate. I think that he will live to regret those words. They are words of which he should be ashamed. To hold out a threat, to try to frighten men of the quality of those who have accepted membership of the designated board is to embark on a foolish exercise. These men, who are highly respected throughout Wales, men of great integrity, whom we have invited to serve on the board, are not the sort to be frightened off by a threat made by the hon. Gentleman. It is a threat, though, with little substance, since it depends on their returning to office.
The hon. and learned Member for Montgomery said that no one appreciated on Second Reading the extensive powers of these boards. The hon. and learned Gentleman is well known throughout Wales for his demand that we should

establish in Mid-Wales a body like the Tennessee Valley Authority. The hon. Member for Carmarthen has made that same demand. That authority has far greater powers of compulsion to take away farms from people. It compulsorily took a million acres of farmland. We prefer to work on the principle of co-operation.

Mr. Hooson: Mr. Hooson rose—

Mr. Thomas: No, I will not give way. The hon. and learned gentleman has not behaved well in Wales—[An HON. MEMBER: "Afraid to give way?"] It will be a sorry day for me when I am afraid of the hon. and learned Gentleman.
The hon. and learned Gentleman said that the people alerted the politicians. I have here a quotation from the first public speech made following the publication of our report. It was made by Mr. Geraint Howells, the prospective Liberal candidate for Brecon and Radnor. He said that the jackboot of tyranny would crash through the door of every small farm in Wales. This is the people leading the politicians! What we have had is an exercise, and the dirtiest exercise in party politics for a long time.
The hon. and learned Member was more disturbed by potential politicians than by the people in Mid-Wales. He also says that nothing that the Secretary of State says can prevent the Board using its powers—

Mr. Hooson: In the future.

Mr. Thomas: In the future. The hon. and learned Gentleman is a lawyer. I would not like to employ him. He should read the Order again.
There is room for those concerned to appeal to the Secretary of State on these important questions.

Mr. Hooson: Mr. Hooson rose—

Mr. Thomas: No, I will not give way. The hon. and learned Member knows that never before have I made a speech during which I refused to give way—[An HON. MEMBER: "Yes"] The hon. Member has a better memory than I have. Tonight, we have had misrepresentation. We have had speeches playing on fears to make decent people nervous, when these powers are directed to helping them.
I turn to reply to some of the other questions raised. I was asked why every holding must be raised to the level of a two-man holding. Why indeed? We do not say that it should be. We have never said that, nor has my right hon. Friend the Minister of Agriculture, Fisheries and Food. What we have said is that there are too many holdings which cannot pro. vide a decent livelihood for one man, and that they should be helped to become capable of yielding a decent living to the farmer and his family. Nothing drives young people from Mid-Wales more than the poverty of a holding that does not give a decent standard of living to them and their family.
As for the inquiry for which the hon. Member for Hereford asks, the inquiry that we had lasted 44 days. The hon. Gentleman said that its terms of reference did not include what he wished, but Sir Ben Bowen Thomas allowed those appearing to present evidence that went far beyond his terms of reference. He recorded

all the evidence and reported it to my right hon. Friend and me. We have given full weight to it. It is quite untrue to suggest that we have not been made aware of opinion about the board.

The board is the best constructive effort to strengthen the economy of Mid-Wales that we have had since I have been in the House, and I believe the best that has been produced this century. It is a constructive effort to offer to the small farmers of Mid-Wales £500,000 a year to improve their farms and strengthen their economy, and this will be done with their willing co-operation.

It being one and a half hours after the commencement of proceedings, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 2 (Exempted business).

The House divided: Ayes 166. Noes 118.

Division No. 44.]
AYES
[11.57 p.m.


Alldritt, Walter
Fernyhough, E.
McNamara, J. Kevin


Anderson, Donald
Fitch, Alan (Wigan)
MacPherson, Malcolm


Archer, Peter (R'wley Regis &amp; Tipt'n)
Fletcher, Raymond (Ilkeston)
Mahon, Peter (Preston, S.)


Armstrong, Ernest
Fletcher, Ted (Darlington)
Mallalieu, E. L. (Brigg)


Astor, John
Foley, Maurice
Ma1lalieu,J.P.W.(Huddersfield,E.)


Atkins, Ronald (Preston, N.)
Forrester, John
Manuel, Archie


Atkinson, Norman (Tottenham)
Fowler, Gerry
Marks, Kenneth


Bagier, Gordon A. T.
Garrett, W. E.
Marsh, Rt. Hn. Richard


Benn, Rt. Hn. Anthony Wedgwood
Gray, Dr. Hugh (Yarmouth)
Mellish, Rt. Hn. Robert


Binns, John
Gregory, Arnold
Mendelson, John


Bishop, E. S.
Griffiths, Eddie (Brightside)
Millan, Bruce


Blackburn, F.
Griffiths, Will (Exchange)
Miller, Dr. M. S.


Blenkinsop, Arthur
Hannan, William
Milne, Edward (Blyth)


Booth, Albert
Harper, Joseph
Molloy, William


Boston, Terence
Harrison, Walter (Wakefield)
Morgan, Elystan (Cardiganshire)


Bray, Dr. Jeremy
Haseldine, Norman
Morris, Alfred (Wythenshawe)


Brooks, Edwin
Hazell, Bert
Morris, Charles R. (Openshaw)


Brown, Hugh D. (G'gow, Provan)
Heffer, Eric S.
Morris, John (Aberavon)


Buchan, Norman
Henig, Stanley
Moyle, Roland


Cant, R. B.
Herbison, Rt. Hn. Margaret
Mulley, Rt. Hn. Frederick


Carmichael, Nei:
Hooley, Frank
Murray, Albert


Coleman, Donald
Hoy, Rt. Hn. James
Newens, Stan


Concannon,J. D.
Huckfield, Leslie
Oakes, Gordon


Conlan, Bernard
Hughes, Rt. Hn. Cledwyn (Anglesey)
O'Halloran, Michael


Dalyell, Tam
Hughes, Roy (Newport)
O'Malley, Brian


Davidson, Arthur (Accrington)
Hunter, Adam
Orme, Stanley


Davies, G. Elfed (Rhondda, E.)
Johnson, James (K'ston-on-Hull, W.)
Oswald, Thomas


Davies, Rt. Hn. Harold (Leek)
Jones, T. Alec (Rhondda, West)
Owen, Dr. David (Plymouth, S'tn)


Davies, Ifor (Gower)
Judd, Frank
Padley, Walter


de Freitas, Rt. Hn. Sir Geoffrey
Latham, Arthur
Palmer, Arthur


Dell, Rt. Hn. Edmund
Lawson, George
Parkyn, Brian (Bedford)


Dempsey, James
Leadbitter, Ted
Pavitt, Laurence


Dewar, Donald
Lee, John (Reading)
Peareon, Arthur (Pontypridd)


Dickens, James
Lewis, Ron (Carlisle)
Peart, Rt. Hn. Fred


Dobson, Ray
Lomas, Kenneth
Perry, Ernest G. (Battersea, S.)


Driberg, Tom
Luard, Evan
Perry, George H. (Nottingham, S.)


Dunwoody, Mrs. Gwyneth (Exeter)
McBride, Neil
Price, Christopher (Perry Bar)


Dunwoody, Dr. John (F'th &amp; C'b'e)
McCann, John
Probert, Arthur


Edelman, Maurice
MacColl, James
Rees, Merlyn


Edwards, William (Merioneth)
Macdonald, A. H.
Rhodes, Geoffrey


Ellis, John
McGuire, Michael
Richard, Ivor


English, Michael
Mackie, John
Roberts, Albert (Normanton)


Ennals, David
Maclennan, Robert
Roberts, Rt. Hn. Goronwy


Evans, Fred (Caerphilly)
MacMillan, Malcolm (Western Isles)
Rodgers, William (Stockton)


Evans, Ioan L. (Birm'h m, Yardley)
McMillan, Tom (Glasgow, C.)
Rose, Paul




Ross, Rt. Hn. William
Urwin, T. W.
Williams, Alan (Swansea, W.)


Rowlands, E.
Varley, Eric G.
Williams, Alan Lee (Hornchurch)


Shaw, Arnold (Ilford, S.)
Wainwright, Edwin (Dearne Valley)
Williams, Clifford (Abertillery)


Sheldon, Robert
Walden, Brian (All Saints)
Williams, Mrs. Shirley (Hitchin)


Shore, Rt. Hn. Peter (Stepney)
Walker, Harold (Doncaster)
Wilson, Rt. Hn. Harold (Huyton)


Short, Rt.Hn.Edward(N'c'tle-u-Tyne)
Wallace, George
Wilson, William (Coventry, S.)


Silkin, Rt. Hn. John (Deptford)
Watkins, David (Consett)
Woof, Robert


Silverman, Julius
Watkins, Tudor (Brecon &amp; Radnor)



Spriggs, Leslie
Wellbeloved, James
TELLERS FOR THE AYES:


Summerskill, Hn. Dr. Shirlev
Whitaker, Ben
Mr. James Hamilton and


Thomas, Rt. Hn. George
White, Mrs. Eirene
Mr. William Hamling.


Tinn, James
Willey, Rt. Hn. Frederick





NOES


Alison, Michael (Barkston Ash)
Godber, Rt. Hn. J. B.
Peel, John


Allason, James (Hemel Hempstead)
Goodhart, Philip
Percival, Ian


Archer, Jeffrey (Louth)
Gower, Raymond
Pounder, Rafton


Atkins, Humphrey (M't'n &amp; M'd'n)
Grant, Anthony
Powell, Rt. Hn. J. Enoch


Baker, W. H. K. (Banff)
Grant-Ferris, Sir Robert
Pym, Francis


Berry, Hn. Anthony
Hawkins, Paul
Rees-Davies, W. R.


Bessell, Peter
Heald, Rt. Hn. Sir Lionel
Rhys Williams, Sir Brandon


Biffen, John
Hiley, Joseph
Rossi, Hugh (Hornsey)


Biggs-Davison, John
Hill, J. E. B.
Royle, Anthony


Birch, Rt. Hn. Nigel
Holland, Philip
Russell, Sir Ronald


Black, Sir Cyril
Hooson, Emlyn
Scott-Hopkins, James


Blaker, Peter
Hornby, Richard
Sharpies, Richard


Boardman, Tom (Leicester, S.W.)
Howell, David (Guildford)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Boyle, Rt. Hn. Sir Edward
Iremonger, T. L.
Smith, Dudley (W'wick &amp; L'mington)


Brinton, Sir Tatton
Irvine, Bryant Godman (Rye)
Stodart, Anthony


Buchanan-Smith, Alick(Angus,N&amp;M)
Jenkin, Patrick (Woodford)
Stoddart-Scott, Col. Sir M.


Campbell, Gordon (Moray &amp; Nairn)
Johnston, Russell (Inverness)
Taylor, Sir Charles (Eastbourne)


Carlisle, Mark
Jopling, Michael
Taylor, Frank (Moss Side)


Carr, Rt. Hn. Robert
Kershaw, Anthony
Temple, John M.


Channon, H. P. G.
Knight, Mrs. Jill
Thatcher, Mrs. Margaret


Chataway, Christopher
Lambton, Viscount
Thorpe, Rt. Hn. Jeremy


Chichester-Clark, R.
Lane, David
Tilney, John


Clark, Henry
Lawler, Wallace
van Straubenzee, W. R.


Clegg, Walter
Lubbock, Eric
Waddington, David


Cooke, Robert
Mac Arthur, Ian
Wainwright, Richard (Colne Valley)


Corfield, F. V.
McNair-Wilson, Michael
Ward, Dame Irene


Crowder, F. P.
Maxwell-Hysiop, R. J.
Weather-Mi, Bernard


Dalkeith, Earl of
Mills, Peter (Torrington)
Wells, John (Maidstone)


Dance, James
Mitchell, David (Basingstoke)
Whitelaw, Rt. Hn. William


Dean, Paul
Montgomery, Fergus
Wiggin, A. W.


Dodds-Parker, Douglas
More, Jasper
Williams, Donald (Dudley)


Eden, Sir John
Morgan, Geraint (Denbigh)
Wilson, Geoffrey (Truro)


Elliot, Capt. Walter (Carshalton)
Morrison, Charles (Devizes)
Winstanley, Dr. M. P.


Elliott,R.W.(N'c'tle-upon-Tyne,N.)
Munro-Lucas-Tooth, Sir Hugh
Worsley, Marcus


Emery, Peter
Nabarro, Sir Gerald
Wright, Esmond


Evans, Gwynfor (C'marthen)
Nicholls, Sir Harmar
Wylle, N. R.


Eyre, Reginald
Onslow, Cranley
Younger, Hn. George


Farr, John
Osbom, John (Hallam)
TELLERS FOR THE NOES:


Fisher, Nigel
Page, Graham (Crosby)
Mr. Hector Monro and


Gibson-Watt, David
Pardoe, John
Mr. Timothy Kitson.


Glover, Sir Douglas

Resolved,
That the Wales Rural Development Board Order 1969, a draft of which was laid before this House on 9th December, be approved.

SPECIAL DEVELOPMENT AREA POLICY

Motion made, and Question proposed, That this House do now adjourn.—[Dr. John Dunwoody.]

12.5 a.m.

Mr. Frederick Willey: As I may be critical of an aspect of Government policy, I make clear that I have no criticism of the Minister of State; in fact, I have every reason to

appreciate what he is doing for the development areas. I equally appreciate the Government aid that is given to the development areas. With 11,500 people employed in Government-owned factories in Sunderland, we have every reason to appreciate Government aid. As I have previously emphasised, this Government have given more massive development aid than has ever been given before.
I am not critical of the introduction of an element of selectivity. I have consistently argued that development aid is too diffuse and not sufficiently specific. I am critical, however, of the special development area policy. This was the introduction of additional incentives to areas of


exceptional high unemployment through pit closures and a year after it was introduced this was extended to the case of Millom which did not suffer from pit closures, on the ground that it was suffering from a very high level of unemployment.
What the Government then said was that they would consider other cases on their merits. My criticism is that the Government have not done this. They have not considered other cases on their merits. I am also critical of some aspects of the policy itself. I do not think it was properly thought out. I think that in many respects it is a negation of planning; certainly a negation of regional planning. I think it has been unimaginatively administered and largely ineffective.
I want to deal with these criticisms in the context of the Northern Region, particularly Sunderland. I am not being parochial for I include the whole Wearside industrial complex. I am sure that my hon. Friend the Member for Sunderland, South (Mr. Bagier) will be anxious to support me in calling attention to the effect of Government policy on Wearside.
I warn my hon. Friend the Minister of State not to call in aid Mr. Dan Smith and the Northern Economic Planning Council, because I have repeatedly made it clear publicly that I am very dissatisfied with the council. That is one of the reasons why I have been anxious to raise these questions tonight.
I have said that the policy was not properly thought out. I want to illustrate this with a few examples from the Northern Region. Haltwhistle is a special development area. The Government were concerned with pit closures. We are therefore concerned with male unemployment. At the time it was designated, Haltwhistle had 2·7 per cent. unemployed. That was considerably less than the regional average. At that time, Sunderland had three times the rate of unemployment that Haltwhistle had. Sunderland now has about three times the rate of unemployment of Haltwhistle. This makes nonsense of Government planning from a regional point of view.
Take another example, Washington New Town. The line dividing the special development area from the other areas runs bang through the middle of the new

town. Therefore, although the industrial location has been decided for Washington, if there is industrial development in one half of the town it has the special additional incentives, but those are lacking if the development takes place in the other half of the town. This can only distort planning for the new town.
I am more concerned about the effect upon the development area as a whole. Almost the whole of the middle of the North-East development area—that is, very largely the Wear Valley—has special development area status. Although Sunderland is at the mouth of the Wear, however, it does not have the advantages of that special area status. Thus, the whole of the central area of the region is designated except the industrial hub and pivot of the area, although all the communications and roads centre on Sunderland. It is absolute nonsense to say that we are providing additional incentives for industry to go up to the Pennines to the disadvantage of Wear-side and Sunderland. It is stupid to say that we are giving incentives for industry even to go to "D" villages at the expense of the centre of that area—Sunderland and the coast.
Even the more immediately surrounding areas—Chester-le-Street, Birtley and Houghton-le-Spring—had about half the unemployed rate which Sunderland had when they were designated with special area status and, hence, entitled to additional incentives. Even now—I am sorry to say this—those areas have similar unemployment rates to Sunderland, but this is no reason for the discrimination against Sunderland. It is an illustration that the policy has so far been ineffective.
It is sometimes said that I have been dealing with percentage rates and not overall numbers. Taking the overall numbers, however, for the central area of the Northern Region, one finds that the numbers unemployed in Sunderland and the Wearside area are about the same as those for the rest of the Wear Valley. It is again, from a planning point of view, stupid to say that where the unemployment is concentrated, the special aid will not be given.
I have also had brought against me the argument that we should have more travel-to-work in the Northern Region. As I have previously pointed out, in


Sunderland we have a record of a large proportion of the industrial population travelling to work. When the then Parliamentary Secretary to the Board of Trade replied to a debate on Sunderland she pointed out that 16,000 people travelled out of Sunderland to work. The figure given in the census and previously relied upon in the Maud Report was only 10,000. So there has been a considerable increase in the numbers travelling out of Sunderland to work, but if we are talking of travelling to work we should be concerned about the direction in which people travel.
We have to think of the investment which we have made, too. We have a shopping centre in Sunderland which has cost £3½ million; we have got the central redevelopment; we have got all the Government aid which has been provided for Sunderland. Surely, if we are to talk of travel to work it is much more reasonable to talk about people travelling into the Wearside area, rather than out of the Wearside area into the less populated parts of the region.
Again, if we carry the argument this far, the reply I have had hitherto has been, "Well, what will other towns do if Wearside gets special development area status?" I would say, in response to that, let other towns establish a case such as Sunderland and Wearside can establish. Tell me of any other town in a development area which is the hub of a whole part of the region and where the rest of the area has special status but not the hub.
If we look to Sunderland itself, again there are overwhelming arguments for granting Wearside special area status. We have had an advance factory, now empty for years. It would have been far better to have had someone occupying the factory even if free of rent. It is largely because, as I have emphasised, we have already got trading estates in Sunderland. We have got substantial Government investment. Therefore, we ought to have additional incentives to see we get employment, following them.
Again, there is the argument about the miners. But we have got, as I have pointed out before, about 400 miners unemployed in Sunderland and a rate of unemployment among miners which

compares with the special development areas. We have neighbouring Sunderland three pits which have been closed. If the designation is made on the basis of unemployed miners, we have a case for Sunderland. However, what I would emphasise to my hon. Friend is this, that a man is unemployed because he is unemployed; that is what matters, not whether he is a miner or a shipyard worker.
I remember writing, 15 years ago, "Plan for Shipbuilding". Most of the things I recommended then have been implemented, largely by the present Government. I argued then that there were to be jobs for far fewer men in shipbuilding, and I was rash enough to quantify this and to give the number of shipyard workers I expected to be redundant. The Economist criticised me at the time for daring to make such a specific forecast. Well, the forecast has proved right, notwithstanding the boom, because one could anticipate the boom as essentially it is based upon obsolescence.
But what I argued then was that because this redundancy could be foreseen we ought more resolutely and effectively to deal with the problem of the location of industry. This ought to have been done before the present Government took office, but the fact that it was not done by the previous Government is not sufficient reason for its not being done now. Surely, what is good for the miners is equally good for the shipyard workers, and redundancy among shipyard workers is far more concentrated than it is among miners.
I conclude by saying that I feel that on these grounds the special development area policy, at any rate so far as it is applied in the northern region, ought to be revised. I do not quarrel in principle with this approach. I believe that there should be a concentration of effort within the development areas, but this concentration should bear relation to the regional factors and be in line with regional policy. It should be much more comprehensive than the special aid now given.
If one considers special problems of particular areas within the development areas, one should consider also such matters as the selective raising of the school-leaving age and freight rates. I know of


a firm which did not come to Sunderland because of freight rate difficulties. We talk a good deal about infrastructure, and this matter should be considered in a concentrated way. I know of a firm that did not come to Sunderland because of difficulties about water. As we have argued before, Government contracts should be more discriminatory.
However politically biased he may be, I do not think anyone can quarrel with the proposition that if considerable public enterprise goes into the construction of buildings which are not used, we should consider the use of those buildings and production by public enterprise. All these things can be done, and are acceptable if the case can be proved of particular difficulties in particular areas.
I think that the case is amply demonstrated. I appreciate the difficulties of my hon. Friend and his sympathy with regard to the problems of the development area, but I hope he is able to reassure by hon. Friend and me that—along with the Secretary of State who has responsibility for regional planning—he will review development area policy in areas such as Wearside.

12.22 a.m.

Mr. Gordon A. T. Bagier: I am grateful to my right hon. Friend for raising this subject tonight, and I hope, in the few moments at my disposal, to underline and fully support what he has said about special area development policy.
I, too, do not disagree with the idea behind the Government's special area development policy. This was to deal with the specific problem of mining closures, but after that problem has been partially dealt with there remains the question of Government planning apart from that specific problem.
If there is a special problem in a particular town at the mouth of the Wear, then aid could and should be given. It is not a question of denying aid to Sunderland, but of putting it in a disadvantageous position compared to other areas. Only by realising the potential of Sunderland and by giving it as much aid as possible can we ultimately determine the future of Washington.
Less than a year ago, when my right hon. Friend and I took part in a similar Adjournment debate, we were told that

we would probably have to look to Washington for our salvation. A large part of Washington has special development area status and is receiving many new factories and new jobs. Sunderland may have to look towards Washington to solve some of its problems if for no other reason than a shortage of building land to provide the jobs required in the town. There is 50,000 sq. ft. of factory accommodation standing empty, as it has done for 2½ years, and 15,000 sq. ft. and 25,000 sq. ft. of factory accommodation is being built.
These factories should be occupied. We suggest an extension of special development area aid to see that these places are filled. As I see Washington and Sunderland, it would be foolish to plan Washington as a new town, both industrial and domestic, and build all the houses required for the workers in these factories, without looking towards the potential dormitory aspect of Sunderland, just a few miles away.
The importance of our problem is paramount. As I pointed out a year ago, one should consider this problem not just in terms of percentages but in human terms—of the number of men chasing each vacancy. For example, when we examine the special development areas we find that in South-West Durham there are 33 men chasing each vacancy; in Chester-le-Street the comparison is 26 to each vacancy; North-West Durham, 11 to one; and South-East Durham, 29 to one. On the other hand, in Wearside there are 61 men chasing each vacancy.
This is a critical problem. In the recent words of Lord Robens, it is to be hoped that the problems of the mining industry are levelling out. However, if the problems I have described can be considered in the context of planning, as against the particular problem of solving the difficulties of the mining industry, it is to be hoped that something urgent will be done for Wearside and Sunderland so that its extremely bad unemployment problem can be overcome. I hope that the Minister will give us hope for the future.

12.26 a.m.

The Minister of State, Ministry of Technology (Mr. Eric G. Varley): I am glad that my right hon. Friend the Member for Sunderland. North (Mr. Willey) has taken this opportunity to discuss


special development area policy. I have been in my present office for only three months, but during that time my right hon. Friend has pursued me with vigour and it might be helpful if, before dealing with the specific points that have been raised in this debate, I commented on the policy generally.
The creation of special development areas has been one of the more important initiatives taken by the Government in the sphere of regional policy since the Industrial Development Act came into force.
Even after two years, it is probably still too soon to judge the full effects of the special development area incentives. Nevertheless, while I recognise the reservations which my right hon. Friend and my hon. Friend the Member for Sunderland, South (Mr. Bagier), have expressed and with which I will deal, I believe that the special development area benefits are helping greatly to ease the economic, social and human problems of the areas which are worst hit by the run-down of employment in the coal industry.
It might be helpful if, first, I described how and why the special development areas came into being. In the November, 1967, White Paper on Fuel Policy the Government accepted the National Coal Board's view that there would have to be an accelerated rate of rundown of employment in the coal industry. The White Paper pointed out that, while the major part of the expected rundown would be covered by natural wastage or redeployment within the industry, the decline would be felt most acutely in some of the development areas and that there were certain coal-mining areas where general measures of assistance to the development areas as a whole were unlikely to be sufficient. The reasons for this were explained in paragraph 124 of the White Paper.
Thus, the Government recognised that the rapid rundown of employment in coal mining would create economic and social problems of a special order in certain parts of the development areas and that these special problems called for special measures. It is important not to lose sight of the essential purpose for which special development areas were created. It was not that we felt that the ordinary development area measures

were failing to achieve their aims. Nor did we think it appropriate to extend special development area benefits to major industrial centres like Clydeside, Tyneside or Teesside, places where, although unemployment remains substantially above the national average and greater than the Government wish to see, industry is already well diversified.
Nor were the measures introduced to top up the incentives available in any area which had difficulty in attracting new firms. We were concerned with what was, quite simply, the particular unemployment problem arising from the accelerated rundown in coal mining in the places where male employment was then overwhelmingly dependent on coal mining and which were in many cases situated at some distance from the main centres of industrial expansion.
The areas chosen were places particularly hard hit by colliery closures where, unless further measures were applied, unemployment would be likely to rise to a very high level and persist for some time. At the time of the announcement, my right hon. Friend the then President of the Board of Trade, whose functions in this connection have now been transferred to my right hon. Friend the Minister of Technology, made it clear that these were intended to be short-term measures which would apply only so long as the employment needs of the areas in question continued to justify special assistance.
My hon. Friend the Member for Sunderland, South warned me not to mention Mr. Dan Smith and the Northern Region Economic Planning Council. However, in fairness to them, I must. To date, the Council supports the Government on this matter. The Northern Region is the one currently bearing the brunt of the loss of jobs in coal mining, and perhaps in passing the House will allow me to pay a tribute to the realism and responsibility which the Council has shown in drawing attention to the needs of the area and the rightness of the policy so far in its recently published "Strategy II".
If time allowed, I could deal with incentives—

Mr. Michael Shaw: Would not the hon. Gentleman agree that, without the help which


has been given, there would have been a much worse situation than there is? Does not the experience show that no such policy for special development areas can succeed unless it is handled against the background of an expanding national economy, instead of the perpetual squeeze and stagnation that we have seen?

Mr. Varley: I am sorry that I gave way to the hon. Gentleman because he is making a party point. The measures that we have taken have been taken in a national context.
Coming to the effectiveness of the policy so far, as I said earlier, it is still too early to judge the effect of these measures. It will always be difficult to make a definitive assessment, if only because we can never be certain what decisions firms would have taken if special development area incentives had not existed. Nevertheless, we believe that these incentives are now exerting an influence. They are effective, and we have only to look at statistics to show that that is the case.
My right hon. Friend referred to the specific case of Millom, saying that it was exceptional. I readily acknowledge that. It was an exception, to deal with the isolated position of Millom, where there was a very bad position. The Government realised that it would be difficult for a remote area to attract new industry on the basis of ordinary development area incentives, and Millom was designated to deal with an exceptional situation.
We are doing everything that we can to get a tenant for the advance factory, and we will continue to do whatever is possible.
I fully recognise the concern which my right hon. Friend and other local representatives feel about the exclusion of Wearside from special development

area benefits. This is a matter to which my colleagues and I have given careful thought on numerous occasions, and we shall continue to do so. Unemployment on Wearside is far higher than any of us would wish to see.
Although, fortunately, it is not as high as in many pockets and coal mining villages and townships in other parts of the Northern Region, it is still large. Although there have been pit closures on Wearside, and coal mining still provides nearly 20 per cent. of local employment, the area has a reasonably wide spread of industry with 41 per cent. of males employed in manufacturing. Unlike many special development areas in the Northern Region and elsewhere, Wearside enjoys good communications and ports facilities. I believe this to be very important and it will help my right hon. Friend, but we are keeping a close watch on the situation.
Many of the difficulties mentioned this evening arise from the fact that there is only a limited supply of mobile industry. Given that there is not enough mobile industry to go round to meet all the needs of assisted areas, any pattern of assistance will lead to certain places getting less than they want. However, I can assure my right hon. Friend and my hon. Friend and others who may be concerned about the implementation of the special development area policy that we shall continue to keep a particularly close watch on progress in the special development areas and on their impact on the rest of the development areas, and that the points which my right hon. Friend and my hon. Friend have made tonight will be fully borne in mind.

Question put and agreed to.

Adjourned accordingly at twenty-four minutes to One o'clock.